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Share Name | Share Symbol | Market | Type |
---|---|---|---|
National Western Life Group Inc | NASDAQ:NWLI | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 488.48 | 480.00 | 776.68 | 0 | 09:09:34 |
UNITED STATES
|
|
SECURITIES AND EXCHANGE COMMISSION
|
|
Washington, D.C. 20549
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|
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FORM 10-Q
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x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
|
|
THE SECURITIES EXCHANGE ACT OF 1934
|
TABLE OF CONTENTS
|
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Page
|
|
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September 30, 2016 (Unaudited) and December 31, 2015
|
|
|
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For the Three Months Ended September 30, 2016 and 2015 (Unaudited)
|
|
|
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For the Nine Months Ended September 30, 2016 and 2015 (Unaudited)
|
|
|
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For the Three Months Ended September 30, 2016 and 2015 (Unaudited)
|
|
|
|
For the Nine Months Ended September 30, 2016 and 2015 (Unaudited)
|
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|
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For the Nine Months Ended September 30, 2016 and 2015 (Unaudited)
|
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|
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For the Nine Months Ended September 30, 2016 and 2015 (Unaudited)
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Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
|
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|
|
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|
|
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|
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(Unaudited)
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|
|||
ASSETS
|
September 30,
2016 |
|
December 31,
2015 |
|||
|
|
|
|
|||
Investments:
|
|
|
|
|||
Securities held to maturity, at amortized cost (fair value: $7,542,335 and $7,335,436)
|
$
|
7,106,373
|
|
|
7,173,967
|
|
Securities available for sale, at fair value (cost: $2,934,609 and $2,847,414)
|
3,106,794
|
|
|
2,879,583
|
|
|
Mortgage loans, net of allowance for possible losses ($650 and $650)
|
146,913
|
|
|
108,311
|
|
|
Policy loans
|
59,218
|
|
|
61,957
|
|
|
Derivatives, index options
|
90,097
|
|
|
38,409
|
|
|
Other long-term investments
|
51,980
|
|
|
26,787
|
|
|
Short-term investments
|
14,972
|
|
|
—
|
|
|
|
|
|
|
|||
Total investments
|
10,576,347
|
|
|
10,289,014
|
|
|
|
|
|
|
|||
Cash and cash equivalents
|
177,288
|
|
|
106,007
|
|
|
Deferred policy acquisition costs
|
795,210
|
|
|
853,451
|
|
|
Deferred sales inducements
|
138,793
|
|
|
159,166
|
|
|
Accrued investment income
|
101,237
|
|
|
99,619
|
|
|
Federal income tax receivable
|
—
|
|
|
12,512
|
|
|
Other assets
|
91,729
|
|
|
92,807
|
|
|
|
|
|
|
|||
Total assets
|
$
|
11,880,604
|
|
|
11,612,576
|
|
|
2016
|
|
2015
|
||||
|
|
|
|
||||
Premiums and other revenues:
|
|
|
|
||||
Universal life and annuity contract charges
|
$
|
40,333
|
|
|
39,175
|
|
|
Traditional life premiums
|
4,631
|
|
|
4,840
|
|
||
Net investment income
|
126,981
|
|
|
56,209
|
|
||
Other revenues
|
4,476
|
|
|
5,067
|
|
||
Net realized investment gains (losses):
|
|
|
|
|
|
||
Total other-than-temporary impairment (“OTTI”) gains (losses)
|
27
|
|
|
284
|
|
||
Portion of OTTI (gains) losses recognized in other comprehensive income
|
(27
|
)
|
|
(284
|
)
|
||
Net OTTI losses recognized in earnings
|
—
|
|
|
—
|
|
||
Other net investment gains (losses)
|
5,426
|
|
|
813
|
|
||
Total net realized investment gains (losses)
|
5,426
|
|
|
813
|
|
||
|
|
|
|
||||
Total revenues
|
181,847
|
|
|
106,104
|
|
||
|
|
|
|
||||
Benefits and expenses:
|
|
|
|
|
|
||
Life and other policy benefits
|
17,430
|
|
|
14,181
|
|
||
Amortization of deferred policy acquisition costs
|
24,395
|
|
|
32,058
|
|
||
Universal life and annuity contract interest
|
67,776
|
|
|
16,259
|
|
||
Other operating expenses
|
23,595
|
|
|
18,482
|
|
||
|
|
|
|
||||
Total benefits and expenses
|
133,196
|
|
|
80,980
|
|
||
|
|
|
|
||||
Earnings before Federal income taxes
|
48,651
|
|
|
25,124
|
|
||
|
|
|
|
||||
Federal income taxes
|
14,915
|
|
|
8,903
|
|
||
|
|
|
|
||||
Net earnings
|
$
|
33,736
|
|
|
16,221
|
|
|
|
|
|
|
||||
Basic earnings per share:
|
|
|
|
|
|
||
Class A
|
$
|
9.54
|
|
|
$
|
4.59
|
|
Class B
|
$
|
4.77
|
|
|
$
|
2.29
|
|
|
|
|
|
||||
Diluted earnings per share:
|
|
|
|
|
|
||
Class A
|
$
|
9.54
|
|
|
$
|
4.59
|
|
Class B
|
$
|
4.77
|
|
|
$
|
2.29
|
|
|
2016
|
|
2015
|
||||
|
|
|
|
||||
Premiums and other revenues:
|
|
|
|
||||
Universal life and annuity contract charges
|
$
|
123,791
|
|
|
114,833
|
|
|
Traditional life premiums
|
13,721
|
|
|
14,349
|
|
||
Net investment income
|
335,732
|
|
|
258,391
|
|
||
Other revenues
|
14,050
|
|
|
15,590
|
|
||
Net realized investment gains (losses):
|
|
|
|
|
|
||
Total other-than-temporary impairment (“OTTI”) gains (losses)
|
80
|
|
|
442
|
|
||
Portion of OTTI (gains) losses recognized in other comprehensive income
|
(80
|
)
|
|
(549
|
)
|
||
Net OTTI losses recognized in earnings
|
—
|
|
|
(107
|
)
|
||
Other net investment gains (losses)
|
10,589
|
|
|
6,156
|
|
||
Total net realized investment gains (losses)
|
10,589
|
|
|
6,049
|
|
||
|
|
|
|
||||
Total revenues
|
497,883
|
|
|
409,212
|
|
||
|
|
|
|
||||
Benefits and expenses:
|
|
|
|
|
|
||
Life and other policy benefits
|
48,571
|
|
|
49,567
|
|
||
Amortization of deferred policy acquisition costs
|
88,581
|
|
|
87,780
|
|
||
Universal life and annuity contract interest
|
179,592
|
|
|
114,729
|
|
||
Other operating expenses
|
66,306
|
|
|
57,794
|
|
||
|
|
|
|
||||
Total benefits and expenses
|
383,050
|
|
|
309,870
|
|
||
|
|
|
|
||||
Earnings before Federal income taxes
|
114,833
|
|
|
99,342
|
|
||
|
|
|
|
||||
Federal income taxes
|
37,553
|
|
|
32,937
|
|
||
|
|
|
|
||||
Net earnings
|
$
|
77,280
|
|
|
66,405
|
|
|
|
|
|
|
||||
Basic earnings per share:
|
|
|
|
|
|
||
Class A
|
$
|
21.85
|
|
|
$
|
18.78
|
|
Class B
|
$
|
10.93
|
|
|
$
|
9.39
|
|
|
|
|
|
||||
Diluted earnings per share:
|
|
|
|
|
|
||
Class A
|
$
|
21.85
|
|
|
$
|
18.77
|
|
Class B
|
$
|
10.93
|
|
|
$
|
9.39
|
|
|
|
|
|
|
2016
|
|
2015
|
|||
|
|
|
|
|||
Net earnings
|
$
|
33,736
|
|
|
16,221
|
|
|
|
|
|
|||
Other comprehensive income (loss), net of effects of deferred costs and taxes:
|
|
|
|
|
|
|
Unrealized gains (losses) on securities:
|
|
|
|
|
|
|
Net unrealized holding gains (losses) arising during period
|
2,824
|
|
|
(7,334
|
)
|
|
Net unrealized liquidity gains (losses)
|
9
|
|
|
95
|
|
|
Reclassification adjustment for net amounts included in net earnings
|
(1,398
|
)
|
|
(96
|
)
|
|
|
|
|
|
|||
Net unrealized gains (losses) on securities
|
1,435
|
|
|
(7,335
|
)
|
|
|
|
|
|
|||
Foreign currency translation adjustments
|
22
|
|
|
54
|
|
|
|
|
|
|
|||
Benefit plans:
|
|
|
|
|
|
|
Amortization of net prior service cost and net gain (loss)
|
(283
|
)
|
|
(303
|
)
|
|
|
|
|
|
|||
Other comprehensive income (loss)
|
1,174
|
|
|
(7,584
|
)
|
|
|
|
|
|
|||
Comprehensive income (loss)
|
$
|
34,910
|
|
|
8,637
|
|
|
2016
|
|
2015
|
|||
|
|
|
|
|||
Net earnings
|
$
|
77,280
|
|
|
66,405
|
|
|
|
|
|
|||
Other comprehensive income, net of effects of deferred costs and taxes:
|
|
|
|
|
|
|
Unrealized gains (losses) on securities:
|
|
|
|
|
|
|
Net unrealized holding gains (losses) arising during period
|
48,927
|
|
|
(19,164
|
)
|
|
Net unrealized liquidity gains (losses)
|
27
|
|
|
188
|
|
|
Reclassification adjustment for net amounts included in net earnings
|
(1,971
|
)
|
|
(2,116
|
)
|
|
|
|
|
|
|||
Net unrealized gains (losses) on securities
|
46,983
|
|
|
(21,092
|
)
|
|
|
|
|
|
|||
Foreign currency translation adjustments
|
(81
|
)
|
|
42
|
|
|
|
|
|
|
|||
Benefit plans:
|
|
|
|
|
|
|
Amortization of net prior service cost and net gain (loss)
|
(850
|
)
|
|
(910
|
)
|
|
|
|
|
|
|||
Other comprehensive income (loss)
|
46,052
|
|
|
(21,960
|
)
|
|
|
|
|
|
|||
Comprehensive income (loss)
|
$
|
123,332
|
|
|
44,445
|
|
|
|
|
|
NATIONAL WESTERN LIFE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY(continued)
For the Nine Months Ended September 30, 2016 and 2015 (Unaudited) (In thousands) |
|||||||
|
2016
|
|
2015
|
||||
|
|
|
|
||||
Foreign currency translation adjustments:
|
|
|
|
|
|
||
Balance at beginning of period
|
2,825
|
|
|
2,685
|
|
||
Change in translation adjustments during period
|
(81
|
)
|
|
42
|
|
||
|
|
|
|
||||
Balance at end of period
|
2,744
|
|
|
2,727
|
|
||
|
|
|
|
||||
Benefit plan liability adjustment:
|
|
|
|
|
|
||
Balance at beginning of period
|
(14,602
|
)
|
|
(13,865
|
)
|
||
Amortization of net prior service cost and net loss, net of tax
|
(850
|
)
|
|
(910
|
)
|
||
|
|
|
|
||||
Balance at end of period
|
(15,452
|
)
|
|
(14,775
|
)
|
||
|
|
|
|
||||
Accumulated other comprehensive income at end of period
|
46,381
|
|
|
19,826
|
|
||
|
|
|
|
||||
Retained earnings:
|
|
|
|
||||
Balance at beginning of period
|
1,569,905
|
|
|
1,472,782
|
|
||
Net earnings
|
77,280
|
|
|
66,405
|
|
||
Stockholder dividends
|
—
|
|
|
—
|
|
||
|
|
|
|
||||
Balance at end of period
|
1,647,185
|
|
|
1,539,187
|
|
||
|
|
|
|
||||
Total stockholders' equity
|
$
|
1,735,318
|
|
|
$
|
1,600,765
|
|
NATIONAL WESTERN LIFE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 2016 and 2015
(Unaudited)
(In thousands)
|
|||||||
|
2016
|
|
2015
|
||||
|
|
|
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net earnings
|
$
|
77,280
|
|
|
66,405
|
|
|
Adjustments to reconcile net earnings to net cash from operating activities:
|
|
|
|
|
|
||
Universal life and annuity contract interest
|
179,592
|
|
|
114,729
|
|
||
Surrender charges and other policy revenues
|
(34,955
|
)
|
|
(13,302
|
)
|
||
Realized (gains) losses on investments
|
(10,589
|
)
|
|
(6,049
|
)
|
||
Accretion/amortization of discounts and premiums, investments
|
51
|
|
|
9
|
|
||
Depreciation and amortization
|
5,823
|
|
|
2,317
|
|
||
(Increase) decrease in value of derivatives
|
(8,307
|
)
|
|
69,884
|
|
||
(Increase) decrease in deferred policy acquisition and sales inducement costs
|
10,799
|
|
|
(632
|
)
|
||
(Increase) decrease in accrued investment income
|
(1,618
|
)
|
|
(4,592
|
)
|
||
(Increase) decrease in other assets
|
(3,683
|
)
|
|
(6,578
|
)
|
||
Increase (decrease) in liabilities for future policy benefits
|
3,408
|
|
|
6,887
|
|
||
Increase (decrease) in other policyholder liabilities
|
(5,175
|
)
|
|
7,382
|
|
||
Increase (decrease) in Federal income taxes liability
|
21,661
|
|
|
(22,703
|
)
|
||
Increase (decrease) in deferred Federal income tax
|
10,587
|
|
|
31,047
|
|
||
Increase (decrease) in other liabilities
|
1,352
|
|
|
2,452
|
|
||
|
|
|
|
||||
Net cash provided by operating activities
|
246,226
|
|
|
247,256
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
||
Proceeds from sales of:
|
|
|
|
|
|
||
Securities held to maturity
|
—
|
|
|
—
|
|
||
Securities available for sale
|
16,087
|
|
|
14,011
|
|
||
Other investments
|
3,947
|
|
|
2,182
|
|
||
Proceeds from maturities and redemptions of:
|
|
|
|
|
|
||
Securities held to maturity
|
304,190
|
|
|
343,494
|
|
||
Securities available for sale
|
134,208
|
|
|
219,676
|
|
||
Derivatives, index options
|
13,273
|
|
|
83,835
|
|
||
Purchases of:
|
|
|
|
|
|
||
Securities held to maturity
|
(231,804
|
)
|
|
(684,725
|
)
|
||
Securities available for sale
|
(229,932
|
)
|
|
(423,672
|
)
|
||
Derivatives, index options
|
(57,224
|
)
|
|
(66,395
|
)
|
||
Other investments
|
(27,525
|
)
|
|
(1,340
|
)
|
||
Net change in short-term investments
|
(14,972
|
)
|
|
—
|
|
||
|
|
|
|
||||
|
Continued on Next Page
|
|
|||||
|
|
|
|
||||
|
|
|
|
NATIONAL WESTERN LIFE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 2016 and 2015
(Unaudited)
(In thousands)
|
|||||||
|
2016
|
|
2015
|
||||
|
|
|
|
||||
|
|
|
|
||||
Principal payments on mortgage loans
|
17,295
|
|
|
66,830
|
|
||
Cost of mortgage loans acquired
|
(55,796
|
)
|
|
(5,040
|
)
|
||
Decrease (increase) in policy loans
|
2,739
|
|
|
2,034
|
|
||
|
|
|
|
||||
Net cash used in investing activities
|
(125,514
|
)
|
|
(449,110
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
||
Deposits to account balances for universal life and annuity contracts
|
626,083
|
|
|
679,128
|
|
||
Return of account balances on universal life and annuity contracts
|
(675,389
|
)
|
|
(668,037
|
)
|
||
|
|
|
|
||||
Net cash provided by (used in) financing activities
|
(49,306
|
)
|
|
11,091
|
|
||
|
|
|
|
||||
Effect of foreign exchange
|
(125
|
)
|
|
42
|
|
||
|
|
|
|
||||
Net increase (decrease) in cash and cash equivalents
|
71,281
|
|
|
(190,721
|
)
|
||
Cash and cash equivalents at beginning of period
|
106,007
|
|
|
277,078
|
|
||
|
|
|
|
||||
Cash and cash equivalents at end of period
|
$
|
177,288
|
|
|
$
|
86,357
|
|
|
|
|
|
||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
|
|
|
|
|
|
||
|
|
|
|
||||
Cash paid (received) during the period for:
|
|
|
|
|
|
||
Interest
|
$
|
33
|
|
|
30
|
|
|
Income taxes
|
$
|
5,032
|
|
|
24,127
|
|
|
|
|
|
|
||||
Noncash operating activities:
|
|
|
|
||||
Deferral of sales inducements
|
$
|
(7,146
|
)
|
|
(9,171
|
)
|
(1)
|
CONSOLIDATION AND BASIS OF PRESENTATION
|
Affected Line Item in the
Statements of Earnings
|
|
Amount Reclassified From Accumulated Other Comprehensive Income
|
|||||||||||
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||
|
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|
|||||
Other net investment gains (losses)
|
|
$
|
2,151
|
|
|
147
|
|
|
3,033
|
|
|
3,362
|
|
Net OTTI losses recognized in earnings
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(107
|
)
|
|
Earnings before Federal income taxes
|
|
2,151
|
|
|
147
|
|
|
3,033
|
|
|
3,255
|
|
|
Federal income taxes
|
|
753
|
|
|
51
|
|
|
1,062
|
|
|
1,139
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net earnings
|
|
$
|
1,398
|
|
|
96
|
|
|
1,971
|
|
|
2,116
|
|
(2)
|
NEW ACCOUNTING PRONOUNCEMENTS
|
(3)
|
STOCKHOLDERS' EQUITY
|
(4)
|
EARNINGS PER SHARE
|
|
Three Months Ended September 30,
|
|||||||||||
|
2016
|
|
2015
|
|||||||||
|
Class A
|
|
Class B
|
|
Class A
|
|
Class B
|
|||||
|
(In thousands except per share amounts)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Numerator for Basic and Diluted Earnings Per Share:
|
|
|
|
|
|
|
|
|||||
Net income
|
$
|
33,736
|
|
|
|
|
16,221
|
|
|
|
||
Dividends - Class A shares
|
—
|
|
|
|
|
—
|
|
|
|
|||
Dividends - Class B shares
|
—
|
|
|
|
|
—
|
|
|
|
|||
|
|
|
|
|
|
|
|
|||||
Undistributed income
|
$
|
33,736
|
|
|
|
|
16,221
|
|
|
|
||
|
|
|
|
|
|
|
|
|||||
Allocation of net income:
|
|
|
|
|
|
|
|
|
|
|||
Dividends
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Allocation of undistributed income
|
32,782
|
|
|
954
|
|
|
15,763
|
|
|
458
|
|
|
|
|
|
|
|
|
|
|
|||||
Net income
|
$
|
32,782
|
|
|
954
|
|
|
15,763
|
|
|
458
|
|
|
|
|
|
|
|
|
|
|||||
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share - weighted-average shares
|
3,436
|
|
|
200
|
|
|
3,436
|
|
|
200
|
|
|
Effect of dilutive stock options
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|||||
Diluted earnings per share - adjusted weighted-average shares for assumed conversions
|
3,436
|
|
|
200
|
|
|
3,437
|
|
|
200
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic Earnings Per Share
|
$
|
9.54
|
|
|
4.77
|
|
|
4.59
|
|
|
2.29
|
|
|
|
|
|
|
|
|
|
|||||
Diluted Earnings Per Share
|
$
|
9.54
|
|
|
4.77
|
|
|
4.59
|
|
|
2.29
|
|
|
Nine Months Ended September 30,
|
|||||||||||
|
2016
|
|
2015
|
|||||||||
|
Class A
|
|
Class B
|
|
Class A
|
|
Class B
|
|||||
|
(In thousands except per share amounts)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Numerator for Basic and Diluted Earnings Per Share:
|
|
|
|
|
|
|
|
|||||
Net income
|
$
|
77,280
|
|
|
|
|
66,405
|
|
|
|
||
Dividends - Class A shares
|
—
|
|
|
|
|
—
|
|
|
|
|||
Dividends - Class B shares
|
—
|
|
|
|
|
—
|
|
|
|
|||
|
|
|
|
|
|
|
|
|||||
Undistributed income
|
$
|
77,280
|
|
|
|
|
66,405
|
|
|
|
||
|
|
|
|
|
|
|
|
|||||
Allocation of net income:
|
|
|
|
|
|
|
|
|
|
|||
Dividends
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Allocation of undistributed income
|
75,095
|
|
|
2,185
|
|
|
64,527
|
|
|
1,878
|
|
|
|
|
|
|
|
|
|
|
|||||
Net income
|
$
|
75,095
|
|
|
2,185
|
|
|
64,527
|
|
|
1,878
|
|
|
|
|
|
|
|
|
|
|||||
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share - weighted-average shares
|
3,436
|
|
|
200
|
|
|
3,436
|
|
|
200
|
|
|
Effect of dilutive stock options
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|||||
Diluted earnings per share - adjusted weighted-average shares for assumed conversions
|
3,436
|
|
|
200
|
|
|
3,437
|
|
|
200
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic Earnings Per Share
|
$
|
21.85
|
|
|
10.93
|
|
|
18.78
|
|
|
9.39
|
|
|
|
|
|
|
|
|
|
|||||
Diluted Earnings Per Share
|
$
|
21.85
|
|
|
10.93
|
|
|
18.77
|
|
|
9.39
|
|
(5)
|
PENSION AND OTHER POSTRETIREMENT PLANS
|
(A)
|
Defined Benefit Pension Plans
|
|
Three Months Ended
|
|
Nine Months Ended
|
|||||||||
|
September 30,
|
|
September 30,
|
|||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Service cost
|
$
|
26
|
|
|
51
|
|
|
79
|
|
|
153
|
|
Interest cost
|
250
|
|
|
246
|
|
|
750
|
|
|
738
|
|
|
Expected return on plan assets
|
(304
|
)
|
|
(330
|
)
|
|
(912
|
)
|
|
(991
|
)
|
|
Amortization of prior service cost
|
—
|
|
|
1
|
|
|
—
|
|
|
3
|
|
|
Amortization of net loss
|
193
|
|
|
196
|
|
|
579
|
|
|
588
|
|
|
|
|
|
|
|
|
|
|
|||||
Net periodic benefit cost
|
$
|
165
|
|
|
164
|
|
|
496
|
|
|
491
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|||||||||
|
September 30,
|
|
September 30,
|
|||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Service cost
|
$
|
109
|
|
|
64
|
|
|
327
|
|
|
192
|
|
Interest cost
|
265
|
|
|
219
|
|
|
794
|
|
|
657
|
|
|
Amortization of prior service cost
|
15
|
|
|
14
|
|
|
45
|
|
|
44
|
|
|
Amortization of net loss
|
501
|
|
|
379
|
|
|
1,503
|
|
|
1,136
|
|
|
|
|
|
|
|
|
|
|
|||||
Net periodic benefit cost
|
$
|
890
|
|
|
676
|
|
|
2,669
|
|
|
2,029
|
|
(B)
|
Defined Benefit Postretirement Healthcare Plans
|
|
Three Months Ended
|
|
Nine Months Ended
|
|||||||||
|
September 30,
|
|
September 30,
|
|||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Interest cost
|
$
|
30
|
|
|
33
|
|
|
90
|
|
|
98
|
|
Amortization of prior service cost
|
26
|
|
|
25
|
|
|
78
|
|
|
77
|
|
|
Amortization of net loss
|
—
|
|
|
15
|
|
|
—
|
|
|
45
|
|
|
|
|
|
|
|
|
|
|
|||||
Net periodic benefit cost
|
$
|
56
|
|
|
73
|
|
|
168
|
|
|
220
|
|
(6)
|
SEGMENT AND OTHER OPERATING INFORMATION
|
Selected Segment Information:
|
|
|
|
|
|
|
|
|
|
||||||
|
Domestic
Life
Insurance
|
|
International
Life
Insurance
|
|
Annuities
|
|
All
Others
|
|
Totals
|
||||||
|
|
|
|
|
(In thousands)
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
September 30, 2016
|
|
|
|
|
|
|
|
|
|
||||||
Condensed Consolidated Balance Sheet Items:
|
|
|
|
|
|
|
|
|
|
||||||
Deferred policy acquisition costs and sales inducements
|
$
|
85,547
|
|
|
239,685
|
|
|
608,771
|
|
|
—
|
|
|
934,003
|
|
Total segment assets
|
961,205
|
|
|
1,248,425
|
|
|
9,232,802
|
|
|
293,963
|
|
|
11,736,395
|
|
|
Future policy benefits
|
809,493
|
|
|
923,235
|
|
|
8,065,370
|
|
|
—
|
|
|
9,798,098
|
|
|
Other policyholder liabilities
|
18,058
|
|
|
14,103
|
|
|
117,926
|
|
|
—
|
|
|
150,087
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|||||
September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|||||
Condensed Consolidated Statement of Earnings:
|
|
|
|
|
|
|
|
|
|
|
|||||
Premiums and contract revenues
|
$
|
8,507
|
|
|
31,066
|
|
|
5,391
|
|
|
—
|
|
|
44,964
|
|
Net investment income
|
12,294
|
|
|
12,763
|
|
|
97,384
|
|
|
4,540
|
|
|
126,981
|
|
|
Other revenues
|
7
|
|
|
10
|
|
|
139
|
|
|
4,320
|
|
|
4,476
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total revenues
|
20,808
|
|
|
43,839
|
|
|
102,914
|
|
|
8,860
|
|
|
176,421
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Life and other policy benefits
|
5,338
|
|
|
5,038
|
|
|
7,054
|
|
|
—
|
|
|
17,430
|
|
|
Amortization of deferred policy acquisition costs
|
(4,331
|
)
|
|
7,296
|
|
|
21,430
|
|
|
—
|
|
|
24,395
|
|
|
Universal life and annuity contract interest
|
9,795
|
|
|
11,287
|
|
|
46,694
|
|
|
—
|
|
|
67,776
|
|
|
Other operating expenses
|
4,847
|
|
|
6,691
|
|
|
7,526
|
|
|
4,531
|
|
|
23,595
|
|
|
Federal income taxes (benefit)
|
1,667
|
|
|
3,591
|
|
|
6,549
|
|
|
1,209
|
|
|
13,016
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total expenses
|
17,316
|
|
|
33,903
|
|
|
89,253
|
|
|
5,740
|
|
|
146,212
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Segment earnings (loss)
|
$
|
3,492
|
|
|
9,936
|
|
|
13,661
|
|
|
3,120
|
|
|
30,209
|
|
|
Domestic
Life
Insurance
|
|
International
Life
Insurance
|
|
Annuities
|
|
All
Others
|
|
Totals
|
||||||
|
|
|
|
|
(In thousands)
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
Nine months ended
|
|
|
|
|
|
|
|
|
|
||||||
September 30, 2016
|
|
|
|
|
|
|
|
|
|
||||||
Condensed Consolidated Statement of Earnings:
|
|
|
|
|
|
|
|
|
|
||||||
Premiums and contract revenues
|
$
|
24,814
|
|
|
95,291
|
|
|
17,407
|
|
|
—
|
|
|
137,512
|
|
Net investment income
|
28,011
|
|
|
30,203
|
|
|
261,579
|
|
|
15,939
|
|
|
335,732
|
|
|
Other revenues
|
37
|
|
|
50
|
|
|
145
|
|
|
13,818
|
|
|
14,050
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total revenues
|
52,862
|
|
|
125,544
|
|
|
279,131
|
|
|
29,757
|
|
|
487,294
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Life and other policy benefits
|
13,629
|
|
|
14,789
|
|
|
20,153
|
|
|
—
|
|
|
48,571
|
|
|
Amortization of deferred acquisition costs
|
989
|
|
|
11,720
|
|
|
75,872
|
|
|
—
|
|
|
88,581
|
|
|
Universal life and annuity contract interest
|
20,855
|
|
|
19,643
|
|
|
139,094
|
|
|
—
|
|
|
179,592
|
|
|
Other operating expenses
|
11,745
|
|
|
17,867
|
|
|
23,044
|
|
|
13,650
|
|
|
66,306
|
|
|
Federal income taxes (benefit)
|
1,833
|
|
|
19,977
|
|
|
6,808
|
|
|
5,229
|
|
|
33,847
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total expenses
|
49,051
|
|
|
83,996
|
|
|
264,971
|
|
|
18,879
|
|
|
416,897
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Segment earnings (loss)
|
$
|
3,811
|
|
|
41,548
|
|
|
14,160
|
|
|
10,878
|
|
|
70,397
|
|
|
|
|
|
|
|
|
|
|
|
Selected Segment Information:
|
|
|
|
|
|
|
|
|
|
||||||
|
Domestic
Life
Insurance
|
|
International
Life
Insurance
|
|
Annuities
|
|
All
Others
|
|
Totals
|
||||||
|
|
|
|
|
(In thousands)
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
September 30, 2015
|
|
|
|
|
|
|
|
|
|
||||||
Condensed Consolidated Balance Sheet Items:
|
|
|
|
|
|
|
|
|
|
||||||
Deferred policy acquisition costs and sales inducements
|
$
|
73,746
|
|
|
252,632
|
|
|
665,738
|
|
|
—
|
|
|
992,116
|
|
Total segment assets
|
831,407
|
|
|
1,260,628
|
|
|
8,999,978
|
|
|
262,310
|
|
|
11,354,323
|
|
|
Future policy benefits
|
720,998
|
|
|
944,618
|
|
|
7,976,312
|
|
|
—
|
|
|
9,641,928
|
|
|
Other policyholder liabilities
|
11,437
|
|
|
17,835
|
|
|
117,331
|
|
|
—
|
|
|
146,603
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statement of Earnings:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premiums and contract revenues
|
$
|
8,259
|
|
|
29,773
|
|
|
5,983
|
|
|
—
|
|
|
44,015
|
|
Net investment income
|
2,095
|
|
|
448
|
|
|
49,518
|
|
|
4,148
|
|
|
56,209
|
|
|
Other revenues
|
3
|
|
|
5
|
|
|
12
|
|
|
5,047
|
|
|
5,067
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total revenues
|
10,357
|
|
|
30,226
|
|
|
55,513
|
|
|
9,195
|
|
|
105,291
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Life and other policy benefits
|
3,545
|
|
|
5,002
|
|
|
5,634
|
|
|
—
|
|
|
14,181
|
|
|
Amortization of deferred acquisition costs
|
1,594
|
|
|
6,834
|
|
|
23,630
|
|
|
—
|
|
|
32,058
|
|
|
Universal life and annuity contract interest
|
14
|
|
|
(854
|
)
|
|
17,099
|
|
|
—
|
|
|
16,259
|
|
|
Other operating expenses
|
2,397
|
|
|
3,929
|
|
|
7,254
|
|
|
4,902
|
|
|
18,482
|
|
|
Federal income taxes (benefit)
|
911
|
|
|
5,363
|
|
|
825
|
|
|
1,520
|
|
|
8,619
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total expenses
|
8,461
|
|
|
20,274
|
|
|
54,442
|
|
|
6,422
|
|
|
89,599
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Segment earnings (loss)
|
$
|
1,896
|
|
|
9,952
|
|
|
1,071
|
|
|
2,773
|
|
|
15,692
|
|
|
Domestic
Life
Insurance
|
|
International
Life
Insurance
|
|
Annuities
|
|
All
Others
|
|
Totals
|
||||||
|
|
|
|
|
(In thousands)
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
Nine months ended
|
|
|
|
|
|
|
|
|
|
||||||
September 30, 2015
|
|
|
|
|
|
|
|
|
|
||||||
Condensed Consolidated Statement of Earnings:
|
|
|
|
|
|
|
|
|
|
||||||
Premiums and contract revenues
|
$
|
22,683
|
|
|
89,470
|
|
|
17,029
|
|
|
—
|
|
|
129,182
|
|
Net investment income
|
17,265
|
|
|
17,847
|
|
|
208,263
|
|
|
15,016
|
|
|
258,391
|
|
|
Other revenues
|
23
|
|
|
66
|
|
|
31
|
|
|
15,470
|
|
|
15,590
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total revenues
|
39,971
|
|
|
107,383
|
|
|
225,323
|
|
|
30,486
|
|
|
403,163
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Life and other policy benefits
|
12,540
|
|
|
16,794
|
|
|
20,233
|
|
|
—
|
|
|
49,567
|
|
|
Amortization of deferred acquisition costs
|
6,473
|
|
|
11,347
|
|
|
69,960
|
|
|
—
|
|
|
87,780
|
|
|
Universal life and annuity contract interest
|
10,413
|
|
|
13,203
|
|
|
91,113
|
|
|
—
|
|
|
114,729
|
|
|
Other operating expenses
|
9,554
|
|
|
15,063
|
|
|
18,866
|
|
|
14,311
|
|
|
57,794
|
|
|
Federal income taxes (benefit)
|
327
|
|
|
16,840
|
|
|
8,309
|
|
|
5,344
|
|
|
30,820
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total expenses
|
39,307
|
|
|
73,247
|
|
|
208,481
|
|
|
19,655
|
|
|
340,690
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Segment earnings (loss)
|
$
|
664
|
|
|
34,136
|
|
|
16,842
|
|
|
10,831
|
|
|
62,473
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Premiums and Other Revenues
:
|
|
|
|
|
|
|
|
|||||
Premiums and contract revenues
|
$
|
44,964
|
|
|
44,015
|
|
|
137,512
|
|
|
129,182
|
|
Net investment income
|
126,981
|
|
|
56,209
|
|
|
335,732
|
|
|
258,391
|
|
|
Other revenues
|
4,476
|
|
|
5,067
|
|
|
14,050
|
|
|
15,590
|
|
|
Realized gains (losses) on investments
|
5,426
|
|
|
813
|
|
|
10,589
|
|
|
6,049
|
|
|
|
|
|
|
|
|
|
|
|||||
Total condensed consolidated premiums and other revenues
|
$
|
181,847
|
|
|
106,104
|
|
|
497,883
|
|
|
409,212
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Federal Income Taxes
:
|
|
|
|
|
|
|
|
|||||
Total segment Federal income taxes
|
$
|
13,016
|
|
|
8,619
|
|
|
33,847
|
|
|
30,820
|
|
Taxes on realized gains (losses) on investments
|
1,899
|
|
|
284
|
|
|
3,706
|
|
|
2,117
|
|
|
|
|
|
|
|
|
|
|
|||||
Total condensed consolidated Federal income taxes
|
$
|
14,915
|
|
|
8,903
|
|
|
37,553
|
|
|
32,937
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Net Earnings
:
|
|
|
|
|
|
|
|
|||||
Total segment earnings
|
$
|
30,209
|
|
|
15,692
|
|
|
70,397
|
|
|
62,473
|
|
Realized gains (losses) on investments, net of taxes
|
3,527
|
|
|
529
|
|
|
6,883
|
|
|
3,932
|
|
|
|
|
|
|
|
|
|
|
|||||
Total condensed consolidated net earnings
|
$
|
33,736
|
|
|
16,221
|
|
|
77,280
|
|
|
66,405
|
|
|
September 30,
|
|||||
|
2016
|
|
2015
|
|||
|
(In thousands)
|
|||||
|
|
|
|
|||
Assets
:
|
|
|
|
|||
Total segment assets
|
$
|
11,736,395
|
|
|
11,354,323
|
|
Other unallocated assets
|
144,209
|
|
|
191,822
|
|
|
|
|
|
|
|||
Total condensed consolidated assets
|
$
|
11,880,604
|
|
|
11,546,145
|
|
(7)
|
SHARE-BASED PAYMENTS
|
|
|
|
Options Outstanding
|
||||||
|
Shares
Available
For Grant
|
|
Shares
|
|
Weighted-
Average
Exercise
Price
|
||||
|
|
|
|
|
|
||||
Stock Options:
|
|
|
|
|
|
||||
Balance at January 1, 2016
|
291,000
|
|
|
27,768
|
|
|
$
|
243.26
|
|
Exercised
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Forfeited
|
—
|
|
|
(500
|
)
|
|
$
|
255.13
|
|
Expired
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Stock options granted
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||
Balance at September 30, 2016
|
291,000
|
|
|
27,268
|
|
|
$
|
243.04
|
|
|
Liability Awards
|
|||||||
|
SAR
|
|
RSU
|
|
PSU
|
|||
|
|
|
|
|
|
|||
Balance at January 1, 2016
|
86,261
|
|
|
—
|
|
|
—
|
|
Exercised
|
(1,275
|
)
|
|
—
|
|
|
—
|
|
Forfeited
|
(2,826
|
)
|
|
(106
|
)
|
|
—
|
|
Granted
|
14,643
|
|
|
6,224
|
|
|
5,727
|
|
|
|
|
|
|
|
|||
Balance at September 30, 2016
|
96,803
|
|
|
6,118
|
|
|
5,727
|
|
|
|
Options/SARs Outstanding
|
||||||||
|
|
Number
Outstanding
|
|
Weighted-
Average
Remaining
Contractual Life
|
|
Number
Exercisable
|
||||
|
|
|
|
|
|
|
||||
Exercise prices:
|
|
|
|
|
|
|||||
255.13 (options)
|
|
20,268
|
|
|
1.5 years
|
|
20,268
|
|
||
208.05 (options)
|
|
7,000
|
|
|
1.7 years
|
|
7,000
|
|
||
114.64 (SARs)
|
|
22,768
|
|
|
2.4 years
|
|
22,768
|
|
||
132.56 (SARs)
|
|
26,818
|
|
|
5.2 years
|
|
13,008
|
|
||
210.22 (SARs)
|
|
33,000
|
|
|
7.2 years
|
|
3,600
|
|
||
216.48 (SARs)
|
|
14,217
|
|
|
9.4 years
|
|
—
|
|
||
|
|
|
|
|
|
|
||||
Totals
|
|
124,071
|
|
|
|
|
66,644
|
|
||
|
|
|
|
|
|
|
|
|||
Aggregate intrinsic value (in thousands)
|
$
|
4,018
|
|
|
|
|
$
|
3,013
|
|
|
September 30,
2016 |
|
December 31,
2015 |
||
|
|
|
|
||
Expected term of options
|
1.5 to 9.4 years
|
|
|
2.3 to 8.0 years
|
|
Expected volatility:
|
|
|
|
||
Range
|
22.53% to 28.81%
|
|
|
21.11% to 37.77%
|
|
Weighted-average
|
23.83
|
%
|
|
23.89
|
%
|
Expected dividend yield
|
0.18
|
%
|
|
0.14
|
%
|
Risk-free rate:
|
|
|
|
||
Range
|
0.54% to 1.52%
|
|
|
0.22% to 1.67%
|
|
Weighted-average
|
1.03
|
%
|
|
0.63
|
%
|
(8)
|
COMMITMENTS AND CONTINGENCIES
|
(9)
|
INVESTMENTS
|
(A)
|
Investment Gains and Losses
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Available for sale debt securities:
|
|
|
|
|
|
|
|
|||||
Realized gains on disposal
|
$
|
1,773
|
|
|
125
|
|
|
2,455
|
|
|
3,323
|
|
Realized losses on disposal
|
(23
|
)
|
|
—
|
|
|
(29
|
)
|
|
(74
|
)
|
|
Held to maturity debt securities:
|
|
|
|
|
|
|
|
|||||
Realized gains on disposal
|
3,278
|
|
|
666
|
|
|
4,764
|
|
|
2,794
|
|
|
Realized losses on disposal
|
(3
|
)
|
|
—
|
|
|
(109
|
)
|
|
—
|
|
|
Equity securities realized gains (losses)
|
401
|
|
|
22
|
|
|
607
|
|
|
113
|
|
|
Real estate gains (losses)
|
—
|
|
|
—
|
|
|
2,901
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|||||
Totals
|
$
|
5,426
|
|
|
813
|
|
|
10,589
|
|
|
6,156
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|||||||||
|
|
September 30,
|
|
September 30,
|
|||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||
|
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|
|||||
Total other-than-temporary impairment gains (losses) on debt securities
|
|
$
|
27
|
|
|
284
|
|
|
80
|
|
|
549
|
|
Portion of loss (gain) recognized in comprehensive income
|
|
(27
|
)
|
|
(284
|
)
|
|
(80
|
)
|
|
(549
|
)
|
|
|
|
|
|
|
|
|
|
|
|||||
Net impairment losses on debt securities recognized in earnings
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Equity securities impairments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(107
|
)
|
|
|
|
|
|
|
|
|
|
|
|||||
Totals
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
(107
|
)
|
|
Three Months Ended September 30, 2016
|
|
Nine Months Ended September 30, 2016
|
|
For the Year Ended
December 31, 2015 |
||||
|
(In thousands)
|
||||||||
|
|
|
|
|
|
||||
Beginning balance, cumulative credit losses related to other-than-temporary impairments
|
$
|
1,649
|
|
|
2,278
|
|
|
2,298
|
|
Reductions for securities sold during current period
|
(209
|
)
|
|
(838
|
)
|
|
(20
|
)
|
|
Additions for credit losses not previously recognized in other-than-temporary impairments
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
||||
Ending balance, cumulative credit losses related to other-than-temporary impairments
|
$
|
1,440
|
|
|
1,440
|
|
|
2,278
|
|
(B)
|
Debt and Equity Securities
|
|
Securities Held to Maturity
|
|||||||||||
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Debt securities:
|
|
|
|
|
|
|
|
|||||
U.S. agencies
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
U.S. Treasury
|
1,932
|
|
|
300
|
|
|
—
|
|
|
2,232
|
|
|
States and political subdivisions
|
440,027
|
|
|
39,460
|
|
|
(3
|
)
|
|
479,484
|
|
|
Public utilities
|
1,061,021
|
|
|
71,581
|
|
|
—
|
|
|
1,132,602
|
|
|
Corporate
|
4,189,831
|
|
|
246,973
|
|
|
(3,327
|
)
|
|
4,433,477
|
|
|
Residential mortgage-backed
|
1,402,475
|
|
|
79,474
|
|
|
(174
|
)
|
|
1,481,775
|
|
|
Home equity
|
9,383
|
|
|
1,526
|
|
|
—
|
|
|
10,909
|
|
|
Manufactured housing
|
1,704
|
|
|
152
|
|
|
—
|
|
|
1,856
|
|
|
|
|
|
|
|
|
|
|
|||||
Totals
|
$
|
7,106,373
|
|
|
439,466
|
|
|
(3,504
|
)
|
|
7,542,335
|
|
|
Securities Available for Sale
|
|||||||||||
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Debt securities:
|
|
|
|
|
|
|
|
|||||
States and political subdivisions
|
$
|
581
|
|
|
20
|
|
|
—
|
|
|
601
|
|
Foreign governments
|
9,953
|
|
|
757
|
|
|
—
|
|
|
10,710
|
|
|
Public utilities
|
127,201
|
|
|
7,834
|
|
|
—
|
|
|
135,035
|
|
|
Corporate
|
2,743,232
|
|
|
161,263
|
|
|
(5,609
|
)
|
|
2,898,886
|
|
|
Residential mortgage-backed
|
29,265
|
|
|
2,829
|
|
|
(43
|
)
|
|
32,051
|
|
|
Home equity
|
9,682
|
|
|
162
|
|
|
—
|
|
|
9,844
|
|
|
Manufactured housing
|
674
|
|
|
11
|
|
|
—
|
|
|
685
|
|
|
|
2,920,588
|
|
|
172,876
|
|
|
(5,652
|
)
|
|
3,087,812
|
|
|
|
|
|
|
|
|
|
|
|||||
Equity securities
|
14,021
|
|
|
5,052
|
|
|
(91
|
)
|
|
18,982
|
|
|
|
|
|
|
|
|
|
|
|||||
Totals
|
$
|
2,934,609
|
|
|
177,928
|
|
|
(5,743
|
)
|
|
3,106,794
|
|
|
Securities Held to Maturity
|
|||||||||||
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Debt securities:
|
|
|
|
|
|
|
|
|||||
U.S. agencies
|
$
|
15,019
|
|
|
275
|
|
|
—
|
|
|
15,294
|
|
U.S. Treasury
|
1,927
|
|
|
317
|
|
|
—
|
|
|
2,244
|
|
|
States and political subdivisions
|
435,941
|
|
|
29,129
|
|
|
(662
|
)
|
|
464,408
|
|
|
Public utilities
|
1,044,063
|
|
|
42,271
|
|
|
(6,621
|
)
|
|
1,079,713
|
|
|
Corporate
|
4,160,628
|
|
|
114,920
|
|
|
(72,913
|
)
|
|
4,202,635
|
|
|
Residential mortgage-backed
|
1,503,021
|
|
|
59,013
|
|
|
(6,227
|
)
|
|
1,555,807
|
|
|
Home equity
|
11,047
|
|
|
1,701
|
|
|
—
|
|
|
12,748
|
|
|
Manufactured housing
|
2,321
|
|
|
266
|
|
|
—
|
|
|
2,587
|
|
|
|
|
|
|
|
|
|
|
|||||
Totals
|
$
|
7,173,967
|
|
|
247,892
|
|
|
(86,423
|
)
|
|
7,335,436
|
|
|
Securities Available for Sale
|
|||||||||||
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Debt securities:
|
|
|
|
|
|
|
|
|||||
States and political subdivisions
|
$
|
586
|
|
|
—
|
|
|
(34
|
)
|
|
552
|
|
Foreign governments
|
9,947
|
|
|
408
|
|
|
—
|
|
|
10,355
|
|
|
Public utilities
|
129,980
|
|
|
5,354
|
|
|
(775
|
)
|
|
134,559
|
|
|
Corporate
|
2,635,536
|
|
|
73,132
|
|
|
(54,503
|
)
|
|
2,654,165
|
|
|
Residential mortgage-backed
|
36,463
|
|
|
3,103
|
|
|
—
|
|
|
39,566
|
|
|
Home equity
|
20,123
|
|
|
825
|
|
|
(12
|
)
|
|
20,936
|
|
|
Manufactured housing
|
1,063
|
|
|
26
|
|
|
—
|
|
|
1,089
|
|
|
|
2,833,698
|
|
|
82,848
|
|
|
(55,324
|
)
|
|
2,861,222
|
|
|
|
|
|
|
|
|
|
|
|||||
Equity securities
|
13,716
|
|
|
4,797
|
|
|
(152
|
)
|
|
18,361
|
|
|
|
|
|
|
|
|
|
|
|||||
Totals
|
$
|
2,847,414
|
|
|
87,645
|
|
|
(55,476
|
)
|
|
2,879,583
|
|
|
Securities Held to Maturity
|
|||||||||||||||||
|
Less than 12 Months
|
|
12 Months or Greater
|
|
Total
|
|||||||||||||
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|||||||
|
(In thousands)
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
States and political subdivisions
|
$
|
3,032
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
3,032
|
|
|
(3
|
)
|
Corporate
|
32,317
|
|
|
(364
|
)
|
|
181,928
|
|
|
(2,963
|
)
|
|
214,245
|
|
|
(3,327
|
)
|
|
Residential mortgage-backed
|
16,997
|
|
|
(63
|
)
|
|
9,308
|
|
|
(111
|
)
|
|
26,305
|
|
|
(174
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total temporarily impaired securities
|
$
|
52,346
|
|
|
(430
|
)
|
|
191,236
|
|
|
(3,074
|
)
|
|
243,582
|
|
|
(3,504
|
)
|
|
Securities Available for Sale
|
|||||||||||||||||
|
Less than 12 Months
|
|
12 Months or Greater
|
|
Total
|
|||||||||||||
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|||||||
|
(In thousands)
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
States and political subdivisions
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Corporate
|
3,027
|
|
|
(21
|
)
|
|
113,560
|
|
|
(5,588
|
)
|
|
116,587
|
|
|
(5,609
|
)
|
|
Residential mortgage-backed
|
1,381
|
|
|
(43
|
)
|
|
—
|
|
|
—
|
|
|
1,381
|
|
|
(43
|
)
|
|
|
4,408
|
|
|
(64
|
)
|
|
113,560
|
|
|
(5,588
|
)
|
|
117,968
|
|
|
(5,652
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Equity securities
|
462
|
|
|
(45
|
)
|
|
336
|
|
|
(46
|
)
|
|
798
|
|
|
(91
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total temporarily impaired securities
|
$
|
4,870
|
|
|
(109
|
)
|
|
113,896
|
|
|
(5,634
|
)
|
|
118,766
|
|
|
(5,743
|
)
|
|
Securities Held to Maturity
|
|||||||||||||||||
|
Less than 12 Months
|
|
12 Months or Greater
|
|
Total
|
|||||||||||||
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|||||||
|
(In thousands)
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
States and political subdivisions
|
$
|
16,763
|
|
|
(387
|
)
|
|
8,723
|
|
|
(275
|
)
|
|
25,486
|
|
|
(662
|
)
|
Public utilities
|
298,962
|
|
|
(5,953
|
)
|
|
17,840
|
|
|
(668
|
)
|
|
316,802
|
|
|
(6,621
|
)
|
|
Corporate
|
1,522,544
|
|
|
(54,295
|
)
|
|
323,567
|
|
|
(18,618
|
)
|
|
1,846,111
|
|
|
(72,913
|
)
|
|
Residential mortgage-backed
|
148,712
|
|
|
(2,726
|
)
|
|
95,443
|
|
|
(3,501
|
)
|
|
244,155
|
|
|
(6,227
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total temporarily impaired securities
|
$
|
1,986,981
|
|
|
(63,361
|
)
|
|
445,573
|
|
|
(23,062
|
)
|
|
2,432,554
|
|
|
(86,423
|
)
|
|
Securities Available for Sale
|
|||||||||||||||||
|
Less than 12 Months
|
|
12 Months or Greater
|
|
Total
|
|||||||||||||
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|
Fair
Value
|
|
Unrealized
Losses
|
|||||||
|
(In thousands)
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
States and political subdivisions
|
$
|
—
|
|
|
—
|
|
|
552
|
|
|
(34
|
)
|
|
552
|
|
|
(34
|
)
|
Public utilities
|
42,093
|
|
|
(775
|
)
|
|
—
|
|
|
—
|
|
|
42,093
|
|
|
(775
|
)
|
|
Corporate
|
843,679
|
|
|
(32,500
|
)
|
|
151,319
|
|
|
(22,003
|
)
|
|
994,998
|
|
|
(54,503
|
)
|
|
Home equity
|
—
|
|
|
—
|
|
|
4,823
|
|
|
(12
|
)
|
|
4,823
|
|
|
(12
|
)
|
|
|
885,772
|
|
|
(33,275
|
)
|
|
156,694
|
|
|
(22,049
|
)
|
|
1,042,466
|
|
|
(55,324
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Equity securities
|
649
|
|
|
(124
|
)
|
|
102
|
|
|
(28
|
)
|
|
751
|
|
|
(152
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total temporarily impaired securities
|
$
|
886,421
|
|
|
(33,399
|
)
|
|
156,796
|
|
|
(22,077
|
)
|
|
1,043,217
|
|
|
(55,476
|
)
|
|
Debt Securities Available for Sale
|
|
Debt Securities Held to Maturity
|
|||||||||
|
Amortized Cost
|
|
Fair Value
|
|
Amortized Cost
|
|
Fair Value
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Due in 1 year or less
|
$
|
141,741
|
|
|
144,968
|
|
|
198,352
|
|
|
202,724
|
|
Due after 1 year through 5 years
|
953,561
|
|
|
1,032,456
|
|
|
1,791,119
|
|
|
1,942,670
|
|
|
Due after 5 years through 10 years
|
1,704,850
|
|
|
1,783,821
|
|
|
3,404,124
|
|
|
3,580,986
|
|
|
Due after 10 years
|
80,815
|
|
|
83,987
|
|
|
299,216
|
|
|
321,415
|
|
|
|
2,880,967
|
|
|
3,045,232
|
|
|
5,692,811
|
|
|
6,047,795
|
|
|
|
|
|
|
|
|
|
|
|||||
Mortgage and asset-backed securities
|
39,621
|
|
|
42,580
|
|
|
1,413,562
|
|
|
1,494,540
|
|
|
|
|
|
|
|
|
|
|
|||||
Total
|
$
|
2,920,588
|
|
|
3,087,812
|
|
|
7,106,373
|
|
|
7,542,335
|
|
(C)
|
Transfer of Securities
|
|
September 30, 2016
|
|
December 31, 2015
|
||||||||||
|
Amount
|
|
%
|
|
Amount
|
|
%
|
||||||
|
(In thousands)
|
|
|
|
(In thousands)
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||
Mortgage Loans by Loan-to-Value Ratio (1):
|
|
|
|
|
|
|
|
||||||
Less than 50%
|
$
|
49,418
|
|
|
33.5
|
|
|
$
|
64,986
|
|
|
59.7
|
|
50% to 60%
|
8,669
|
|
|
5.9
|
|
|
9,714
|
|
|
8.9
|
|
||
60% to 70%
|
56,191
|
|
|
38.1
|
|
|
10,134
|
|
|
9.3
|
|
||
70% to 80%
|
9,543
|
|
|
6.4
|
|
|
4,843
|
|
|
4.4
|
|
||
80% to 90%
|
23,742
|
|
|
16.1
|
|
|
19,284
|
|
|
17.7
|
|
||
Greater than 90%
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Gross balance
|
147,563
|
|
|
100.0
|
|
|
108,961
|
|
|
100.0
|
|
||
|
|
|
|
|
|
|
|
||||||
Allowance for possible losses
|
(650
|
)
|
|
(0.4
|
)
|
|
(650
|
)
|
|
(0.6
|
)
|
||
|
|
|
|
|
|
|
|
||||||
Totals
|
$
|
146,913
|
|
|
99.6
|
|
|
$
|
108,311
|
|
|
99.4
|
|
|
September 30, 2016
|
|
December 31, 2015
|
|||
|
(In thousands)
|
|||||
|
|
|
|
|||
Balance, beginning of period
|
$
|
650
|
|
|
650
|
|
Provision
|
—
|
|
|
—
|
|
|
Releases
|
—
|
|
|
—
|
|
|
|
|
|
|
|||
Balance, end of period
|
$
|
650
|
|
|
650
|
|
(10)
|
FAIR VALUES OF FINANCIAL INSTRUMENTS
|
|
September 30, 2016
|
|||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Debt securities, available for sale
|
$
|
3,087,812
|
|
|
—
|
|
|
3,087,812
|
|
|
—
|
|
Equity securities, available for sale
|
18,982
|
|
|
18,889
|
|
|
93
|
|
|
—
|
|
|
Derivatives, index options
|
90,097
|
|
|
—
|
|
|
—
|
|
|
90,097
|
|
|
|
|
|
|
|
|
|
|
|||||
Total assets
|
$
|
3,196,891
|
|
|
18,889
|
|
|
3,087,905
|
|
|
90,097
|
|
|
|
|
|
|
|
|
|
|||||
Policyholder account balances (a)
|
$
|
96,095
|
|
|
—
|
|
|
—
|
|
|
96,095
|
|
Other liabilities (b)
|
6,434
|
|
|
—
|
|
|
—
|
|
|
6,434
|
|
|
|
|
|
|
|
|
|
|
|||||
Total liabilities
|
$
|
102,529
|
|
|
—
|
|
|
—
|
|
|
102,529
|
|
|
December 31, 2015
|
|||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Debt securities, available for sale
|
$
|
2,861,222
|
|
|
—
|
|
|
2,861,222
|
|
|
—
|
|
Equity securities, available for sale
|
18,361
|
|
|
17,980
|
|
|
381
|
|
|
—
|
|
|
Derivatives, index options
|
38,409
|
|
|
—
|
|
|
—
|
|
|
38,409
|
|
|
|
|
|
|
|
|
|
|
|||||
Total assets
|
$
|
2,917,992
|
|
|
17,980
|
|
|
2,861,603
|
|
|
38,409
|
|
|
|
|
|
|
|
|
|
|||||
Policyholder account balances (a)
|
$
|
58,359
|
|
|
—
|
|
|
—
|
|
|
58,359
|
|
Other liabilities (b)
|
7,669
|
|
|
—
|
|
|
—
|
|
|
7,669
|
|
|
|
|
|
|
|
|
|
|
|||||
Total liabilities
|
$
|
66,028
|
|
|
—
|
|
|
—
|
|
|
66,028
|
|
|
September 30, 2016
|
|||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Debt securities, available for sale:
|
|
|
|
|
|
|
|
|||||
Priced by third-party vendors
|
$
|
3,087,812
|
|
|
—
|
|
|
3,087,812
|
|
|
—
|
|
Priced internally
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Subtotal
|
3,087,812
|
|
|
—
|
|
|
3,087,812
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|||||
Equity securities, available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
Priced by third-party vendors
|
18,982
|
|
|
18,889
|
|
|
93
|
|
|
—
|
|
|
Priced internally
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Subtotal
|
18,982
|
|
|
18,889
|
|
|
93
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|||||
Derivatives, index options:
|
|
|
|
|
|
|
|
|
|
|
|
|
Priced by third-party vendors
|
90,097
|
|
|
—
|
|
|
—
|
|
|
90,097
|
|
|
Priced internally
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Subtotal
|
90,097
|
|
|
—
|
|
|
—
|
|
|
90,097
|
|
|
|
|
|
|
|
|
|
|
|||||
Total
|
$
|
3,196,891
|
|
|
18,889
|
|
|
3,087,905
|
|
|
90,097
|
|
|
|
|
|
|
|
|
|
|||||
Percent of total
|
100.0
|
%
|
|
0.6
|
%
|
|
96.6
|
%
|
|
2.8
|
%
|
|
December 31, 2015
|
|||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Debt securities, available for sale:
|
|
|
|
|
|
|
|
|||||
Priced by third-party vendors
|
$
|
2,861,222
|
|
|
—
|
|
|
2,861,222
|
|
|
—
|
|
Priced internally
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Subtotal
|
2,861,222
|
|
|
—
|
|
|
2,861,222
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|||||
Equity securities, available for sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
Priced by third-party vendors
|
18,361
|
|
|
17,980
|
|
|
381
|
|
|
—
|
|
|
Priced internally
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Subtotal
|
18,361
|
|
|
17,980
|
|
|
381
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|||||
Derivatives, index options:
|
|
|
|
|
|
|
|
|
|
|
|
|
Priced by third-party vendors
|
38,409
|
|
|
—
|
|
|
—
|
|
|
38,409
|
|
|
Priced internally
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Subtotal
|
38,409
|
|
|
—
|
|
|
—
|
|
|
38,409
|
|
|
|
|
|
|
|
|
|
|
|||||
Total
|
$
|
2,917,992
|
|
|
17,980
|
|
|
2,861,603
|
|
|
38,409
|
|
|
|
|
|
|
|
|
|
|||||
Percent of total
|
100.0
|
%
|
|
0.6
|
%
|
|
98.1
|
%
|
|
1.3
|
%
|
|
For the Three Months Ended September 30, 2016
|
||||||||||||||
|
Debt
Securities,
Available
for Sale
|
|
Equity
Securities,
Available
for Sale
|
|
Derivatives, Index Options
|
|
Total
Assets
|
|
Other
Liabilities
|
||||||
|
(In thousands)
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||
Balance at July 1, 2016
|
$
|
—
|
|
|
—
|
|
|
63,319
|
|
|
63,319
|
|
|
81,056
|
|
Total realized and unrealized gains (losses):
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Included in net income
|
—
|
|
|
—
|
|
|
19,113
|
|
|
19,113
|
|
|
13,492
|
|
|
Purchases, sales, issuances and settlements, net:
|
|
|
|
|
|
|
|
|
|
||||||
Purchases
|
—
|
|
|
—
|
|
|
18,848
|
|
|
18,848
|
|
|
18,848
|
|
|
Sales
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Issuances
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
388
|
|
|
Settlements
|
—
|
|
|
—
|
|
|
(11,183
|
)
|
|
(11,183
|
)
|
|
(11,255
|
)
|
|
Transfers into (out of) Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance at end of period
|
$
|
—
|
|
|
—
|
|
|
90,097
|
|
|
90,097
|
|
|
102,529
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets held at the end of the reporting period:
|
|
|
|
|
|
|
|
|
|
||||||
Net investment income
|
$
|
—
|
|
|
—
|
|
|
23,851
|
|
|
23,851
|
|
|
—
|
|
Benefits and expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,150
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total
|
$
|
—
|
|
|
—
|
|
|
23,851
|
|
|
23,851
|
|
|
25,150
|
|
|
For the Three Months ended September 30, 2015
|
||||||||||||||
|
Debt
Securities,
Available
for Sale
|
|
Equity
Securities,
Available
for Sale
|
|
Derivatives, Index Options
|
|
Total
Assets
|
|
Other
Liabilities
|
||||||
|
(In thousands)
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||
Balance at July 1, 2015
|
$
|
—
|
|
|
—
|
|
|
72,527
|
|
|
72,527
|
|
|
95,368
|
|
Total realized and unrealized gains (losses):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Included in net income
|
—
|
|
|
—
|
|
|
(52,816
|
)
|
|
(52,816
|
)
|
|
(42,887
|
)
|
|
Included in other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Purchases, sales, issuances and settlements, net:
|
|
|
|
|
|
|
|
|
|
||||||
Purchases
|
—
|
|
|
—
|
|
|
24,891
|
|
|
24,891
|
|
|
24,891
|
|
|
Sales
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Issuances
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Settlements
|
—
|
|
|
—
|
|
|
(19,376
|
)
|
|
(19,376
|
)
|
|
(19,377
|
)
|
|
Transfers into (out of) Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance at end of period
|
$
|
—
|
|
|
—
|
|
|
25,226
|
|
|
25,226
|
|
|
57,995
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets held at the end of the reporting period:
|
|
|
|
|
|
|
|
|
|
||||||
Net investment income
|
$
|
—
|
|
|
—
|
|
|
(51,707
|
)
|
|
(51,707
|
)
|
|
—
|
|
Benefits and expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,048
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total
|
$
|
—
|
|
|
—
|
|
|
(51,707
|
)
|
|
(51,707
|
)
|
|
(1,048
|
)
|
|
Nine Months Ended September 30, 2016
|
||||||||||||||
|
Debt
Securities,
Available
for Sale
|
|
Equity
Securities,
Available
for Sale
|
|
Derivatives, Index Options
|
|
Total
Assets
|
|
Other
Liabilities
|
||||||
|
(In thousands)
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||
Beginning balance, January 1, 2016
|
$
|
—
|
|
|
—
|
|
|
38,409
|
|
|
38,409
|
|
|
66,028
|
|
Total realized and unrealized gains (losses):
|
|
|
|
|
|
|
|
|
|
|
|
||||
Included in net income
|
—
|
|
|
—
|
|
|
8,307
|
|
|
8,307
|
|
|
(7,691
|
)
|
|
Included in other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Purchases, sales, issuances and settlements, net:
|
|
|
|
|
|
|
|
|
|
||||||
Purchases
|
—
|
|
|
—
|
|
|
56,387
|
|
|
56,387
|
|
|
56,387
|
|
|
Sales
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
Issuances
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
921
|
|
|
Settlements
|
—
|
|
|
—
|
|
|
(13,006
|
)
|
|
(13,006
|
)
|
|
(13,116
|
)
|
|
Transfers into (out of) Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance at end of period
|
$
|
—
|
|
|
—
|
|
|
90,097
|
|
|
90,097
|
|
|
102,529
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets held at the end of the reporting period:
|
|
|
|
|
|
|
|
|
|
||||||
Net investment income
|
$
|
—
|
|
|
—
|
|
|
15,628
|
|
|
15,628
|
|
|
—
|
|
Other operating expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,582
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total
|
$
|
—
|
|
|
—
|
|
|
15,628
|
|
|
15,628
|
|
|
13,582
|
|
|
Nine Months Ended September 30, 2015
|
||||||||||||||
|
Debt
Securities,
Available
for Sale
|
|
Equity
Securities,
Available
for Sale
|
|
Derivatives, Index Options
|
|
Total
Assets
|
|
Other
Liabilities
|
||||||
|
(In thousands)
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||
Beginning balance, January 1, 2015
|
$
|
—
|
|
|
—
|
|
|
114,287
|
|
|
114,287
|
|
|
142,492
|
|
Total realized and unrealized gains (losses):
|
|
|
|
|
|
|
|
|
|
|
|
||||
Included in net income
|
—
|
|
|
—
|
|
|
(69,884
|
)
|
|
(69,884
|
)
|
|
(64,923
|
)
|
|
Included in other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Purchases, sales, issuances and settlements, net:
|
|
|
|
|
|
|
|
|
|
||||||
Purchases
|
—
|
|
|
—
|
|
|
64,820
|
|
|
64,820
|
|
|
64,820
|
|
|
Sales
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Issuances
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Settlements
|
—
|
|
|
—
|
|
|
(83,997
|
)
|
|
(83,997
|
)
|
|
(84,394
|
)
|
|
Transfers into (out of) Level 3
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance at end of period
|
$
|
—
|
|
|
—
|
|
|
25,226
|
|
|
25,226
|
|
|
57,995
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets held at the end of the reporting period:
|
|
|
|
|
|
|
|
|
|
||||||
Net investment income
|
$
|
—
|
|
|
—
|
|
|
(67,392
|
)
|
|
(67,392
|
)
|
|
—
|
|
Other operating expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,648
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total
|
$
|
—
|
|
|
—
|
|
|
(67,392
|
)
|
|
(67,392
|
)
|
|
(2,648
|
)
|
|
September 30, 2016
|
||||||
|
Fair Value
|
|
Valuation Technique
|
|
Unobservable Input
|
||
|
(In thousands)
|
|
|
|
|
||
|
|
|
|
|
|
||
Derivatives, index options
|
$
|
90,097
|
|
|
Broker prices
|
|
Implied volatility
|
|
|
|
|
|
Inputs from broker proprietary models
|
||
|
|
|
|
|
|
||
Total assets
|
$
|
90,097
|
|
|
|
|
|
|
|
|
|
|
|
||
Policyholder account balances
|
$
|
96,095
|
|
|
Deterministic cash flow model
|
|
Projected option cost
|
Other liabilities
|
6,434
|
|
|
Black-Scholes model
|
|
Expected term
|
|
|
|
|
|
|
Forfeiture assumptions
|
||
|
|
|
|
|
|
||
Total liabilities
|
$
|
102,529
|
|
|
|
|
|
|
December 31, 2015
|
||||||
|
Fair Value
|
|
Valuation Technique
|
|
Unobservable Input
|
||
|
(In thousands)
|
|
|
|
|
||
|
|
|
|
|
|
||
Derivatives, index options
|
$
|
38,409
|
|
|
Broker prices
|
|
Implied volatility
|
|
|
|
|
|
Inputs from broker proprietary models
|
||
|
|
|
|
|
|
||
Total assets
|
$
|
38,409
|
|
|
|
|
|
|
|
|
|
|
|
||
Policyholder account balances
|
$
|
58,359
|
|
|
Deterministic cash flow model
|
|
Projected option cost
|
Other liabilities
|
7,669
|
|
|
Black-Scholes model
|
|
Expected term
|
|
|
|
|
|
|
Forfeiture assumptions
|
||
|
|
|
|
|
|
||
Total liabilities
|
$
|
66,028
|
|
|
|
|
|
|
September 30, 2016
|
||||||||||||||
|
|
|
Fair Value Hierarchy Level
|
||||||||||||
|
Carrying
Values
|
|
Fair
Values
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
|
(In thousands)
|
||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||
Investments in debt and equity securities:
|
|
|
|
|
|
|
|
|
|
||||||
Securities held to maturity
|
$
|
7,106,373
|
|
|
7,542,335
|
|
|
—
|
|
|
7,542,335
|
|
|
—
|
|
Securities available for sale
|
3,106,794
|
|
|
3,106,794
|
|
|
18,889
|
|
|
3,087,905
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
177,288
|
|
|
177,288
|
|
|
177,288
|
|
|
—
|
|
|
—
|
|
|
Mortgage loans
|
146,913
|
|
|
150,125
|
|
|
—
|
|
|
—
|
|
|
150,125
|
|
|
Policy loans
|
59,218
|
|
|
113,290
|
|
|
—
|
|
|
—
|
|
|
113,290
|
|
|
Other loans
|
12,349
|
|
|
11,878
|
|
|
—
|
|
|
—
|
|
|
11,878
|
|
|
Derivatives, index options
|
90,097
|
|
|
90,097
|
|
|
—
|
|
|
—
|
|
|
90,097
|
|
|
Short-term investments
|
14,972
|
|
|
14,972
|
|
|
—
|
|
|
14,972
|
|
|
—
|
|
|
Life interest in Trust
|
7,379
|
|
|
12,775
|
|
|
—
|
|
|
—
|
|
|
12,775
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
LIABILITIES
|
|
|
|
|
|
|
|
|
|
||||||
Deferred annuity contracts
|
$
|
7,693,495
|
|
|
7,314,565
|
|
|
—
|
|
|
—
|
|
|
7,314,565
|
|
Immediate annuity and supplemental contracts
|
443,162
|
|
|
485,702
|
|
|
—
|
|
|
—
|
|
|
485,702
|
|
|
December 31, 2015
|
||||||||||||||
|
|
|
Fair Value Hierarchy Level
|
||||||||||||
|
Carrying
Values
|
|
Fair
Values
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
|
(In thousands)
|
||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||
Investments in debt and equity securities:
|
|
|
|
|
|
|
|
|
|
||||||
Securities held to maturity
|
$
|
7,173,967
|
|
|
7,335,436
|
|
|
—
|
|
|
7,335,436
|
|
|
—
|
|
Securities available for sale
|
2,879,583
|
|
|
2,879,583
|
|
|
17,980
|
|
|
2,861,603
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
106,007
|
|
|
106,007
|
|
|
106,007
|
|
|
—
|
|
|
—
|
|
|
Mortgage loans
|
108,311
|
|
|
111,162
|
|
|
—
|
|
|
—
|
|
|
111,162
|
|
|
Policy loans
|
61,957
|
|
|
108,550
|
|
|
—
|
|
|
—
|
|
|
108,550
|
|
|
Other loans
|
2,779
|
|
|
2,957
|
|
|
—
|
|
|
—
|
|
|
2,957
|
|
|
Derivatives, index options
|
38,409
|
|
|
38,409
|
|
|
—
|
|
|
—
|
|
|
38,409
|
|
|
Life interest in Trust
|
7,379
|
|
|
12,775
|
|
|
—
|
|
|
—
|
|
|
12,775
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
LIABILITIES
|
|
|
|
|
|
|
|
|
|
||||||
Deferred annuity contracts
|
$
|
7,640,951
|
|
|
7,288,108
|
|
|
—
|
|
|
|
|
7,288,108
|
|
|
Immediate annuity and supplemental contracts
|
434,468
|
|
|
461,457
|
|
|
—
|
|
|
—
|
|
|
461,457
|
|
(11)
|
DERIVATIVE INVESTMENTS
|
|
September 30, 2016
|
||||||||||
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||
|
Balance
Sheet
Location
|
|
Fair
Value
|
|
Balance
Sheet
Location
|
|
Fair
Value
|
||||
|
|
|
(In thousands)
|
|
|
|
(In thousands)
|
||||
|
|
|
|
|
|
|
|
||||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
||||
Equity index options
|
Derivatives, Index Options
|
|
$
|
90,097
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||||
Fixed-index products
|
|
|
|
|
Universal Life and Annuity Contracts
|
|
$
|
96,095
|
|
||
|
|
|
|
|
|
|
|
||||
Total
|
|
|
$
|
90,097
|
|
|
|
|
$
|
96,095
|
|
|
December 31, 2015
|
||||||||||
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||
|
Balance
Sheet
Location
|
|
Fair
Value
|
|
Balance
Sheet
Location
|
|
Fair
Value
|
||||
|
|
|
(In thousands)
|
|
|
|
(In thousands)
|
||||
|
|
|
|
|
|
|
|
||||
Derivatives not designated as hedging instruments
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
||||
Equity index options
|
Derivatives, Index Options
|
|
$
|
38,409
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|||
Fixed-index products
|
|
|
|
|
|
Universal Life and Annuity Contracts
|
|
$
|
58,359
|
|
|
|
|
|
|
|
|
|
|
||||
Total
|
|
|
$
|
38,409
|
|
|
|
|
$
|
58,359
|
|
|
|
|
|
September 30,
2016 |
|
September 30,
2015 |
|||
Derivatives Not Designated
As Hedging Instruments
|
|
Location of Gain
or (Loss) Recognized
In Income on Derivatives
|
|
Amount of Gain or
(Loss) Recognized in
Income on Derivatives
|
|||||
|
|
|
|
(In thousands)
|
|||||
|
|
|
|
|
|
|
|||
Equity index options
|
|
Net investment income
|
|
$
|
19,114
|
|
|
(52,816
|
)
|
|
|
|
|
|
|
|
|||
Fixed-index products
|
|
Universal life and annuity contract interest
|
|
(12,194
|
)
|
|
41,839
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
$
|
6,920
|
|
|
(10,977
|
)
|
|
|
|
|
September 30,
2016 |
|
September 30,
2015 |
|||
Derivatives Not Designated
As Hedging Instruments
|
|
Location of Gain
or (Loss) Recognized
In Income on Derivatives
|
|
Amount of Gain or
(Loss) Recognized in
Income on Derivatives
|
|||||
|
|
|
|
(In thousands)
|
|||||
|
|
|
|
|
|
|
|||
Equity index options
|
|
Net investment income
|
|
$
|
8,307
|
|
|
(69,884
|
)
|
|
|
|
|
|
|
|
|||
Fixed-index products
|
|
Universal life and annuity contract interest
|
|
5,645
|
|
|
62,275
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
$
|
13,952
|
|
|
(7,609
|
)
|
|
|
|
|
|
|
|
•
|
the level of sales and premium revenues collected
|
•
|
persistency of policies and contracts
|
•
|
returns on investments sufficient to produce acceptable spread margins over interest crediting rates
|
•
|
investment credit quality which minimizes the risk of default or impairment
|
•
|
levels of policy benefits and costs to acquire business
|
•
|
the level of operating expenses
|
•
|
effect of interest rate changes on revenues and investments including asset and liability matching
|
•
|
maintaining adequate levels of capital and surplus
|
•
|
actual levels of surrenders, withdrawals, claims and interest spreads
|
•
|
changes in assumptions for amortization of deferred policy acquisition expenses and deferred sales inducements
|
•
|
changes in the fair value of derivative index options and embedded derivatives pertaining to fixed-index life and annuity products
|
•
|
pricing and availability of adequate reinsurance
|
•
|
litigation subject to unfavorable judicial development, including the time and expense of litigation
|
|
Three Months Ended
|
|
Nine Months Ended
|
|||||||||
|
September 30,
|
|
September 30,
|
|||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
International:
|
|
|
|
|
|
|
|
|||||
Universal life
|
$
|
590
|
|
|
793
|
|
|
1,785
|
|
|
2,220
|
|
Traditional life
|
416
|
|
|
796
|
|
|
1,396
|
|
|
2,289
|
|
|
Equity-index life
|
2,143
|
|
|
3,483
|
|
|
6,744
|
|
|
10,724
|
|
|
|
|
|
|
|
|
|
|
|||||
|
3,149
|
|
|
5,072
|
|
|
9,925
|
|
|
15,233
|
|
|
Domestic:
|
|
|
|
|
|
|
|
|
|
|
|
|
Universal life
|
22
|
|
|
15
|
|
|
32
|
|
|
49
|
|
|
Traditional life
|
32
|
|
|
14
|
|
|
89
|
|
|
105
|
|
|
Equity-index life
|
4,309
|
|
|
4,387
|
|
|
12,287
|
|
|
13,281
|
|
|
|
|
|
|
|
|
|
|
|||||
|
4,363
|
|
|
4,416
|
|
|
12,408
|
|
|
13,435
|
|
|
|
|
|
|
|
|
|
|
|||||
Totals
|
$
|
7,512
|
|
|
9,488
|
|
|
22,333
|
|
|
28,668
|
|
|
Nine Months Ended September 30,
|
||||
|
2016
|
|
2015
|
||
|
|
|
|
||
Percentage of International Sales:
|
|
|
|
||
Latin America
|
95.9
|
%
|
|
84.6
|
%
|
Pacific Rim
|
—
|
|
|
12.4
|
|
Eastern Europe/Asia
|
4.1
|
|
|
3.0
|
|
|
|
|
|
||
Totals
|
100.0
|
%
|
|
100.0
|
%
|
|
Average New Policy Face Amount
|
||||
|
Domestic
|
|
International
|
||
|
|
|
|
||
Year ended December 31, 2010
|
164,800
|
|
|
338,600
|
|
Year ended December 31, 2011
|
178,500
|
|
|
363,600
|
|
Year ended December 31, 2012
|
254,900
|
|
|
380,200
|
|
Year ended December 31, 2013
|
286,000
|
|
|
384,000
|
|
Year ended December 31, 2014
|
286,600
|
|
|
382,600
|
|
Year ended December 31, 2015
|
274,500
|
|
|
342,500
|
|
Nine months ended September 30, 2016
|
311,300
|
|
|
328,600
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Fixed-index annuities
|
$
|
156,297
|
|
|
174,294
|
|
|
498,186
|
|
|
511,796
|
|
Other deferred annuities
|
4,671
|
|
|
9,787
|
|
|
27,075
|
|
|
39,700
|
|
|
Immediate annuities
|
807
|
|
|
1,757
|
|
|
3,198
|
|
|
3,774
|
|
|
|
|
|
|
|
|
|
|
|||||
Totals
|
$
|
161,775
|
|
|
185,838
|
|
|
528,459
|
|
|
555,270
|
|
|
Annuities In Force as of
|
|||||
|
September 30,
|
|||||
|
2016
|
|
2015
|
|||
|
($ in thousands)
|
|||||
|
|
|
|
|||
Fixed-index annuities
|
|
|
|
|||
Number of policies
|
73,930
|
|
|
71,520
|
|
|
GAAP annuity reserves
|
$
|
5,666,087
|
|
|
5,425,463
|
|
|
|
|
|
|||
Other deferred annuities
|
|
|
|
|
||
Number of policies
|
47,780
|
|
|
51,370
|
|
|
GAAP annuity reserves
|
$
|
1,958,672
|
|
|
2,132,500
|
|
|
|
|
|
|||
Immediate annuities
|
|
|
|
|
||
Number of policies
|
14,400
|
|
|
15,120
|
|
|
GAAP annuity reserves
|
$
|
368,724
|
|
|
363,173
|
|
|
|
|
|
|||
Total annuities
|
|
|
|
|
||
Number of policies
|
136,110
|
|
|
138,010
|
|
|
GAAP annuity reserves
|
$
|
7,993,483
|
|
|
7,921,136
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Universal life and annuity contract charges
|
$
|
40,333
|
|
|
39,175
|
|
|
123,791
|
|
|
114,833
|
|
Traditional life premiums
|
4,631
|
|
|
4,840
|
|
|
13,721
|
|
|
14,349
|
|
|
Net investment income (excluding derivatives)
|
107,867
|
|
|
109,025
|
|
|
327,425
|
|
|
328,275
|
|
|
Other revenues
|
4,476
|
|
|
5,067
|
|
|
14,050
|
|
|
15,590
|
|
|
|
|
|
|
|
|
|
|
|||||
Operating revenues
|
157,307
|
|
|
158,107
|
|
|
478,987
|
|
|
473,047
|
|
|
Derivative gain (loss)
|
19,114
|
|
|
(52,816
|
)
|
|
8,307
|
|
|
(69,884
|
)
|
|
Net realized investment gains (losses)
|
5,426
|
|
|
813
|
|
|
10,589
|
|
|
6,049
|
|
|
|
|
|
|
|
|
|
|
|||||
Total revenues
|
$
|
181,847
|
|
|
106,104
|
|
|
497,883
|
|
|
409,212
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Contract Revenues:
|
|
|
|
|
|
|
|
|||||
Cost of insurance and administrative charges
|
$
|
33,335
|
|
|
33,754
|
|
|
99,624
|
|
|
99,997
|
|
Surrender charges
|
11,348
|
|
|
10,173
|
|
|
34,955
|
|
|
28,898
|
|
|
Other charges
|
(187
|
)
|
|
(735
|
)
|
|
1,131
|
|
|
(2,537
|
)
|
|
Gross contract revenues
|
44,496
|
|
|
43,192
|
|
|
135,710
|
|
|
126,358
|
|
|
|
|
|
|
|
|
|
|
|||||
Reinsurance premiums
|
(4,163
|
)
|
|
(4,017
|
)
|
|
(11,919
|
)
|
|
(11,525
|
)
|
|
|
|
|
|
|
|
|
|
|||||
Net contract revenues
|
$
|
40,333
|
|
|
39,175
|
|
|
123,791
|
|
|
114,833
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Gross investment income:
|
|
|
|
|
|
|
|
|||||
Debt and equities
|
$
|
103,650
|
|
|
104,524
|
|
|
312,833
|
|
|
311,911
|
|
Mortgage loans
|
2,070
|
|
|
2,967
|
|
|
5,576
|
|
|
7,823
|
|
|
Policy loans
|
868
|
|
|
995
|
|
|
2,732
|
|
|
2,945
|
|
|
Short-term investments
|
252
|
|
|
28
|
|
|
507
|
|
|
183
|
|
|
Other invested assets
|
1,318
|
|
|
785
|
|
|
6,594
|
|
|
6,241
|
|
|
|
|
|
|
|
|
|
|
|||||
Total investment income
|
108,158
|
|
|
109,299
|
|
|
328,242
|
|
|
329,103
|
|
|
Less: investment expenses
|
291
|
|
|
274
|
|
|
817
|
|
|
828
|
|
|
|
|
|
|
|
|
|
|
|||||
Net investment income (excluding derivatives)
|
107,867
|
|
|
109,025
|
|
|
327,425
|
|
|
328,275
|
|
|
Derivative gain (loss)
|
19,114
|
|
|
(52,816
|
)
|
|
8,307
|
|
|
(69,884
|
)
|
|
|
|
|
|
|
|
|
|
|||||
Net investment income
|
$
|
126,981
|
|
|
56,209
|
|
|
335,732
|
|
|
258,391
|
|
|
Nine Months Ended September 30,
|
|||||
|
2016
|
|
2015
|
|||
|
(In thousands)
|
|||||
|
|
|
|
|||
Excluding derivatives:
|
|
|
|
|||
Net investment income
|
$
|
327,425
|
|
|
328,275
|
|
Average invested assets, at amortized cost
|
$
|
10,407,898
|
|
|
10,084,537
|
|
Annual yield on average invested assets
|
4.19
|
%
|
|
4.34
|
%
|
|
|
|
|
|
|||
Including derivatives:
|
|
|
|
|
|
|
Net investment income
|
$
|
335,732
|
|
|
258,391
|
|
Average invested assets, at amortized cost
|
$
|
10,472,151
|
|
|
10,154,294
|
|
Annual yield on average invested assets
|
4.27
|
%
|
|
3.39
|
%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Derivatives:
|
|
|
|
|
|
|
|
|||||
Unrealized gain (loss)
|
$
|
32,821
|
|
|
(52,391
|
)
|
|
60,121
|
|
|
(100,509
|
)
|
Realized gain (loss)
|
(13,707
|
)
|
|
(425
|
)
|
|
(51,814
|
)
|
|
30,625
|
|
|
|
|
|
|
|
|
|
|
|||||
Total gain (loss) included in net investment income
|
$
|
19,114
|
|
|
(52,816
|
)
|
|
8,307
|
|
|
(69,884
|
)
|
|
|
|
|
|
|
|
|
|||||
Total contract interest
|
$
|
67,776
|
|
|
16,259
|
|
|
179,592
|
|
|
114,729
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Impairment or valuation write-downs:
|
|
|
|
|
|
|
|
|||||
Bonds
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Equities
|
—
|
|
|
—
|
|
|
—
|
|
|
107
|
|
|
|
|
|
|
|
|
|
|
|||||
Total
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
107
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Life and other policy benefits
|
$
|
17,430
|
|
|
14,181
|
|
|
48,571
|
|
|
49,567
|
|
Amortization of deferred policy acquisition costs
|
24,395
|
|
|
32,058
|
|
|
88,581
|
|
|
87,780
|
|
|
Universal life and annuity contract interest
|
67,776
|
|
|
16,259
|
|
|
179,592
|
|
|
114,729
|
|
|
Other operating expenses
|
23,595
|
|
|
18,482
|
|
|
66,306
|
|
|
57,794
|
|
|
|
|
|
|
|
|
|
|
|||||
Totals
|
$
|
133,196
|
|
|
80,980
|
|
|
383,050
|
|
|
309,870
|
|
Increase (Decrease) in DPAC Balance
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Unlocking
|
$
|
8,170
|
|
|
—
|
|
|
11,790
|
|
|
1,810
|
|
True-up
|
(2,350
|
)
|
|
490
|
|
|
(3,370
|
)
|
|
6,010
|
|
|
|
|
|
|
|
|
|
|
|||||
Totals
|
$
|
5,820
|
|
|
490
|
|
|
8,420
|
|
|
7,820
|
|
|
September 30,
|
|
September 30,
|
||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
|
(Excluding fixed-index products)
|
|
(Including fixed-index products)
|
||||||||
|
|
|
|
|
|
|
|
||||
Annuity
|
2.32
|
%
|
|
2.45
|
%
|
|
1.94
|
%
|
|
1.50
|
%
|
Interest sensitive life
|
3.62
|
%
|
|
3.72
|
%
|
|
3.90
|
%
|
|
2.27
|
%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
General insurance expenses
|
$
|
7,661
|
|
|
5,037
|
|
|
25,447
|
|
|
16,948
|
|
Nursing home expenses
|
4,531
|
|
|
4,902
|
|
|
13,650
|
|
|
14,311
|
|
|
Compensation expenses
|
6,909
|
|
|
3,929
|
|
|
14,063
|
|
|
13,114
|
|
|
Commission expenses
|
3,043
|
|
|
3,137
|
|
|
8,480
|
|
|
8,841
|
|
|
Taxes, licenses and fees
|
1,451
|
|
|
1,477
|
|
|
4,666
|
|
|
4,580
|
|
|
|
|
|
|
|
|
|
|
|||||
Totals
|
$
|
23,595
|
|
|
18,482
|
|
|
66,306
|
|
|
57,794
|
|
|
Domestic
Life
Insurance
|
|
International
Life
Insurance
|
|
Annuities
|
|
All
Others
|
|
Totals
|
||||||
|
(In thousands)
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||
Segment earnings (losses):
|
|
|
|
|
|
|
|
|
|
||||||
Three months ended:
|
|
|
|
|
|
|
|
|
|
||||||
September 30, 2016
|
$
|
3,492
|
|
|
9,936
|
|
|
13,661
|
|
|
3,120
|
|
|
30,209
|
|
September 30, 2015
|
$
|
1,896
|
|
|
9,952
|
|
|
1,071
|
|
|
2,773
|
|
|
15,692
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Nine months ended:
|
|
|
|
|
|
|
|
|
|
|
|||||
September 30, 2016
|
$
|
3,811
|
|
|
41,548
|
|
|
14,160
|
|
|
10,878
|
|
|
70,397
|
|
September 30, 2015
|
$
|
664
|
|
|
34,136
|
|
|
16,842
|
|
|
10,831
|
|
|
62,473
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Premiums and contract revenues:
|
|
|
|
|
|
|
|
|||||
Premiums and contract charges
|
$
|
8,507
|
|
|
8,259
|
|
|
24,814
|
|
|
22,683
|
|
Net investment income
|
12,294
|
|
|
2,095
|
|
|
28,011
|
|
|
17,265
|
|
|
Other revenues
|
7
|
|
|
3
|
|
|
37
|
|
|
23
|
|
|
|
|
|
|
|
|
|
|
|||||
Total revenues
|
20,808
|
|
|
10,357
|
|
|
52,862
|
|
|
39,971
|
|
|
|
|
|
|
|
|
|
|
|||||
Benefits and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Life and other policy benefits
|
5,338
|
|
|
3,545
|
|
|
13,629
|
|
|
12,540
|
|
|
Amortization of deferred policy acquisition costs
|
(4,331
|
)
|
|
1,594
|
|
|
989
|
|
|
6,473
|
|
|
Universal life insurance contract interest
|
9,795
|
|
|
14
|
|
|
20,855
|
|
|
10,413
|
|
|
Other operating expenses
|
4,847
|
|
|
2,397
|
|
|
11,745
|
|
|
9,554
|
|
|
|
|
|
|
|
|
|
|
|||||
Total benefits and expenses
|
15,649
|
|
|
7,550
|
|
|
47,218
|
|
|
38,980
|
|
|
|
|
|
|
|
|
|
|
|||||
Segment earnings (loss) before Federal income taxes
|
5,159
|
|
|
2,807
|
|
|
5,644
|
|
|
991
|
|
|
Provision (benefit) for Federal income taxes
|
1,667
|
|
|
911
|
|
|
1,833
|
|
|
327
|
|
|
|
|
|
|
|
|
|
|
|||||
Segment earnings (loss)
|
$
|
3,492
|
|
|
1,896
|
|
|
3,811
|
|
|
664
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Universal life insurance revenues
|
$
|
9,384
|
|
|
9,875
|
|
|
26,909
|
|
|
24,279
|
|
Traditional life insurance premiums
|
1,161
|
|
|
201
|
|
|
3,825
|
|
|
3,648
|
|
|
Reinsurance premiums
|
(2,038
|
)
|
|
(1,817
|
)
|
|
(5,920
|
)
|
|
(5,244
|
)
|
|
|
|
|
|
|
|
|
|
|||||
Totals
|
$
|
8,507
|
|
|
8,259
|
|
|
24,814
|
|
|
22,683
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Universal life insurance:
|
|
|
|
|
|
|
|
|||||
First year and single premiums
|
$
|
30,373
|
|
|
30,534
|
|
|
85,915
|
|
|
91,263
|
|
Renewal premiums
|
5,135
|
|
|
5,423
|
|
|
15,481
|
|
|
15,910
|
|
|
|
|
|
|
|
|
|
|
|||||
Totals
|
$
|
35,508
|
|
|
35,957
|
|
|
101,396
|
|
|
107,173
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Net investment income (excluding derivatives)
|
$
|
8,329
|
|
|
8,368
|
|
|
25,093
|
|
|
23,635
|
|
Derivative gain (loss)
|
3,965
|
|
|
(6,273
|
)
|
|
2,918
|
|
|
(6,370
|
)
|
|
|
|
|
|
|
|
|
|
|||||
Net investment income
|
$
|
12,294
|
|
|
2,095
|
|
|
28,011
|
|
|
17,265
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Increase (Decrease) in DPAC Balance
|
|
|
|
|
|
|
|
|||||
Unlocking
|
$
|
8,170
|
|
|
—
|
|
|
8,170
|
|
|
—
|
|
True-up
|
460
|
|
|
2,520
|
|
|
3,260
|
|
|
5,710
|
|
|
|
|
|
|
|
|
|
|
|||||
Totals
|
$
|
8,630
|
|
|
2,520
|
|
|
11,430
|
|
|
5,710
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Premiums and other revenues:
|
|
|
|
|
|
|
|
|||||
Premiums and contract revenues
|
$
|
31,066
|
|
|
29,773
|
|
|
95,291
|
|
|
89,470
|
|
Net investment income
|
12,763
|
|
|
448
|
|
|
30,203
|
|
|
17,847
|
|
|
Other revenues
|
10
|
|
|
5
|
|
|
50
|
|
|
66
|
|
|
|
|
|
|
|
|
|
|
|||||
Total revenues
|
43,839
|
|
|
30,226
|
|
|
125,544
|
|
|
107,383
|
|
|
|
|
|
|
|
|
|
|
|||||
Benefits and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Life and other policy benefits
|
5,038
|
|
|
5,002
|
|
|
14,789
|
|
|
16,794
|
|
|
Amortization of deferred policy acquisition costs
|
7,296
|
|
|
6,834
|
|
|
11,720
|
|
|
11,347
|
|
|
Universal life insurance and annuity contract interest
|
11,287
|
|
|
(854
|
)
|
|
19,643
|
|
|
13,203
|
|
|
Other operating expenses
|
6,691
|
|
|
3,929
|
|
|
17,867
|
|
|
15,063
|
|
|
|
|
|
|
|
|
|
|
|||||
Total benefits and expenses
|
30,312
|
|
|
14,911
|
|
|
64,019
|
|
|
56,407
|
|
|
|
|
|
|
|
|
|
|
|||||
Segment earnings (losses) before Federal income taxes
|
13,527
|
|
|
15,315
|
|
|
61,525
|
|
|
50,976
|
|
|
Provision (benefit) for Federal income taxes
|
3,591
|
|
|
5,363
|
|
|
19,977
|
|
|
16,840
|
|
|
|
|
|
|
|
|
|
|
|||||
Segment earnings (loss)
|
$
|
9,936
|
|
|
9,952
|
|
|
41,548
|
|
|
34,136
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Universal life insurance revenues
|
$
|
29,687
|
|
|
26,332
|
|
|
91,359
|
|
|
85,056
|
|
Traditional life insurance premiums
|
3,470
|
|
|
5,639
|
|
|
9,896
|
|
|
10,701
|
|
|
Reinsurance premiums
|
(2,091
|
)
|
|
(2,198
|
)
|
|
(5,964
|
)
|
|
(6,287
|
)
|
|
|
|
|
|
|
|
|
|
|||||
Totals
|
$
|
31,066
|
|
|
29,773
|
|
|
95,291
|
|
|
89,470
|
|
|
Amount in $'s
|
|
Annualized Termination Rate
|
|||
|
(millions)
|
|
|
|||
|
|
|
|
|||
Volume In Force Terminations
|
|
|
|
|||
Year ended December 31, 2011
|
$
|
1,465.1
|
|
|
7.3
|
%
|
Year ended December 31, 2012
|
1,828.4
|
|
|
8.7
|
%
|
|
Year ended December 31, 2013
|
1,838.5
|
|
|
8.6
|
%
|
|
Year ended December 31, 2014
|
1,825.5
|
|
|
8.4
|
%
|
|
Year ended December 31, 2015
|
2,659.1
|
|
|
12.3
|
%
|
|
Nine months ended September 30, 2016
|
1,819.2
|
|
|
12.0
|
%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Universal life insurance:
|
|
|
|
|
|
|
|
|||||
First year and single premiums
|
$
|
5,578
|
|
|
7,706
|
|
|
14,679
|
|
|
20,162
|
|
Renewal premiums
|
23,393
|
|
|
24,835
|
|
|
69,903
|
|
|
76,831
|
|
|
|
|
|
|
|
|
|
|
|||||
Totals
|
$
|
28,971
|
|
|
32,541
|
|
|
84,582
|
|
|
96,993
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Net investment income (excluding derivatives)
|
$
|
9,221
|
|
|
9,233
|
|
|
27,738
|
|
|
28,637
|
|
Derivative gain (loss)
|
3,542
|
|
|
(8,786
|
)
|
|
2,465
|
|
|
(10,790
|
)
|
|
|
|
|
|
|
|
|
|
|||||
Net investment income
|
$
|
12,763
|
|
|
447
|
|
|
30,203
|
|
|
17,847
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Increase (Decrease) in DPAC Balance
|
|
|
|
|
|
|
|
|||||
Unlocking
|
$
|
—
|
|
|
—
|
|
|
7,270
|
|
|
7,120
|
|
True-up
|
2,260
|
|
|
2,220
|
|
|
9,400
|
|
|
8,760
|
|
|
|
|
|
|
|
|
|
|
|||||
Totals
|
$
|
2,260
|
|
|
2,220
|
|
|
16,670
|
|
|
15,880
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Premiums and other revenues:
|
|
|
|
|
|
|
|
|||||
Premiums and contract revenues
|
$
|
5,391
|
|
|
5,983
|
|
|
17,407
|
|
|
17,029
|
|
Net investment income
|
97,384
|
|
|
49,518
|
|
|
261,579
|
|
|
208,263
|
|
|
Other revenues
|
139
|
|
|
12
|
|
|
145
|
|
|
31
|
|
|
|
|
|
|
|
|
|
|
|||||
Total revenues
|
102,914
|
|
|
55,513
|
|
|
279,131
|
|
|
225,323
|
|
|
|
|
|
|
|
|
|
|
|||||
Benefits and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Life and other policy benefits
|
7,054
|
|
|
5,634
|
|
|
20,153
|
|
|
20,233
|
|
|
Amortization of deferred policy acquisition costs
|
21,430
|
|
|
23,630
|
|
|
75,872
|
|
|
69,960
|
|
|
Annuity contract interest
|
46,694
|
|
|
17,099
|
|
|
139,094
|
|
|
91,113
|
|
|
Other operating expenses
|
7,526
|
|
|
7,254
|
|
|
23,044
|
|
|
18,866
|
|
|
|
|
|
|
|
|
|
|
|||||
Total benefits and expenses
|
82,704
|
|
|
53,617
|
|
|
258,163
|
|
|
200,172
|
|
|
|
|
|
|
|
|
|
|
|||||
Segment earnings (loss) before Federal income taxes
|
20,210
|
|
|
1,896
|
|
|
20,968
|
|
|
25,151
|
|
|
Provision (benefit) for Federal income taxes
|
6,549
|
|
|
825
|
|
|
6,808
|
|
|
8,309
|
|
|
|
|
|
|
|
|
|
|
|||||
Segment earnings (loss)
|
$
|
13,661
|
|
|
1,071
|
|
|
14,160
|
|
|
16,842
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Fixed-index annuities
|
$
|
156,417
|
|
|
179,911
|
|
|
502,386
|
|
|
534,848
|
|
Other deferred annuities
|
7,555
|
|
|
9,296
|
|
|
31,767
|
|
|
32,134
|
|
|
Immediate annuities
|
1,865
|
|
|
3,053
|
|
|
5,575
|
|
|
7,978
|
|
|
|
|
|
|
|
|
|
|
|||||
Totals
|
$
|
165,837
|
|
|
192,260
|
|
|
539,728
|
|
|
574,960
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||
|
(In thousands)
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|||||
Net investment income (excluding derivatives)
|
$
|
85,777
|
|
|
87,275
|
|
|
258,655
|
|
|
260,987
|
|
Derivative gain (loss)
|
11,607
|
|
|
(37,757
|
)
|
|
2,924
|
|
|
(52,724
|
)
|
|
|
|
|
|
|
|
|
|
|||||
Net investment income
|
$
|
97,384
|
|
|
49,518
|
|
|
261,579
|
|
|
208,263
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Increase (Decrease) in DPAC Balance
|
|
|
|
|
|
|
|
|||||
Unlocking
|
$
|
—
|
|
|
—
|
|
|
(3,650
|
)
|
|
(5,310
|
)
|
True-up
|
(5,070
|
)
|
|
(4,250
|
)
|
|
(16,030
|
)
|
|
(8,460
|
)
|
|
|
|
|
|
|
|
|
|
|||||
Totals
|
$
|
(5,070
|
)
|
|
(4,250
|
)
|
|
(19,680
|
)
|
|
(13,770
|
)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Fixed-index annuities
|
$
|
26,780
|
|
|
(4,936
|
)
|
|
68,373
|
|
|
16,722
|
|
All other annuities
|
18,140
|
|
|
17,769
|
|
|
63,590
|
|
|
63,250
|
|
|
|
|
|
|
|
|
|
|
|||||
Gross contract interest
|
44,920
|
|
|
12,833
|
|
|
131,963
|
|
|
79,972
|
|
|
Bonus interest deferred and capitalized
|
(4,243
|
)
|
|
(4,413
|
)
|
|
(13,587
|
)
|
|
(12,560
|
)
|
|
Bonus interest amortization
|
6,017
|
|
|
8,679
|
|
|
20,718
|
|
|
23,701
|
|
|
|
|
|
|
|
|
|
|
|||||
Total contract interest
|
$
|
46,694
|
|
|
17,099
|
|
|
139,094
|
|
|
91,113
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||||||
|
Carrying
Value
|
|
%
|
|
Carrying
Value
|
|
%
|
||||
|
(In thousands)
|
|
|
|
(In thousands)
|
|
|
||||
|
|
|
|
|
|
|
|
||||
Debt securities
|
$
|
10,194,185
|
|
|
96.3
|
|
$
|
10,035,189
|
|
|
97.4
|
Mortgage loans
|
146,913
|
|
|
1.4
|
|
108,311
|
|
|
1.1
|
||
Policy loans
|
59,218
|
|
|
0.6
|
|
61,957
|
|
|
0.6
|
||
Derivatives, index options
|
90,097
|
|
|
0.9
|
|
38,409
|
|
|
0.4
|
||
Real estate
|
31,951
|
|
|
0.3
|
|
16,333
|
|
|
0.2
|
||
Equity securities
|
18,982
|
|
|
0.2
|
|
18,361
|
|
|
0.2
|
||
Other
|
35,001
|
|
|
0.3
|
|
10,454
|
|
|
0.1
|
||
|
|
|
|
|
|
|
|
||||
Totals
|
$
|
10,576,347
|
|
|
100.0
|
|
$
|
10,289,014
|
|
|
100.0
|
|
September 30, 2016
|
|
December 31, 2015
|
||||||||
|
Carrying
Value
|
|
%
|
|
Carrying
Value
|
|
%
|
||||
|
(In thousands)
|
|
|
|
(In thousands)
|
|
|
||||
|
|
|
|
|
|
|
|
||||
Corporate
|
$
|
7,088,717
|
|
|
69.6
|
|
$
|
6,814,793
|
|
|
68.0
|
Residential mortgage-backed securities
|
1,434,526
|
|
|
14.1
|
|
1,542,587
|
|
|
15.4
|
||
Public utilities
|
1,196,056
|
|
|
11.7
|
|
1,178,622
|
|
|
11.7
|
||
State and political subdivisions
|
440,628
|
|
|
4.3
|
|
436,493
|
|
|
4.3
|
||
U.S. agencies
|
—
|
|
|
—
|
|
15,019
|
|
|
0.1
|
||
Asset-backed securities
|
21,616
|
|
|
0.2
|
|
35,393
|
|
|
0.4
|
||
Foreign governments
|
10,710
|
|
|
0.1
|
|
10,355
|
|
|
0.1
|
||
U.S. Treasury
|
1,932
|
|
|
—
|
|
1,927
|
|
|
—
|
||
|
|
|
|
|
|
|
|
||||
Totals
|
$
|
10,194,185
|
|
|
100.0
|
|
$
|
10,035,189
|
|
|
100.0
|
|
Nine Months Ended September 30,
|
|
Year Ended December 31,
|
||||
|
2016
|
|
2015
|
||||
|
($ In thousands)
|
||||||
|
|
|
|
||||
Cost of acquisitions
|
$
|
453,985
|
|
|
$
|
1,309,930
|
|
Average credit quality
|
BBB+
|
|
|
A-
|
|
||
Effective annual yield
|
3.43
|
%
|
|
3.51
|
%
|
||
Spread to treasuries
|
1.68
|
%
|
|
1.36
|
%
|
||
Effective duration
|
8.3 years
|
|
|
8.5 years
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||||||
|
Carrying
Value
|
|
%
|
|
Carrying
Value
|
|
%
|
||||
|
(In thousands)
|
|
|
|
(In thousands)
|
|
|
||||
|
|
|
|
|
|
|
|
||||
AAA
|
$
|
91,828
|
|
|
0.9
|
|
$
|
97,068
|
|
|
1.0
|
AA
|
2,225,589
|
|
|
21.8
|
|
2,361,417
|
|
|
23.5
|
||
A
|
3,303,077
|
|
|
32.4
|
|
3,399,230
|
|
|
33.9
|
||
BBB
|
4,402,172
|
|
|
43.2
|
|
4,016,665
|
|
|
40.0
|
||
BB and other below investment grade
|
171,519
|
|
|
1.7
|
|
160,809
|
|
|
1.6
|
||
|
|
|
|
|
|
|
|
||||
Totals
|
$
|
10,194,185
|
|
|
100.0
|
|
$
|
10,035,189
|
|
|
100.0
|
|
Below Investment Grade Debt Securities
|
|||||||||||
|
Amortized
Cost
|
|
Carrying
Value
|
|
Fair
Value
|
|
% of
Invested
Assets
|
|||||
|
(In thousands, except percentages)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
September 30, 2016
|
$
|
173,700
|
|
|
171,519
|
|
|
175,811
|
|
|
1.6
|
%
|
|
|
|
|
|
|
|
|
|||||
December 31, 2015
|
$
|
166,508
|
|
|
160,809
|
|
|
160,867
|
|
|
1.6
|
%
|
|
|
Below Investment Grade Debt Securities
|
|||||||||||
|
|
Amortized Cost
|
|
Carrying Value
|
|
Fair Value
|
|
Fair Value
|
|||||
Industry Category
|
|
September 30, 2016
|
|
September 30, 2016
|
|
September 30, 2016
|
|
December 31, 2015
|
|||||
|
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|
|||||
Asset-backed securities
|
|
$
|
9,009
|
|
|
9,031
|
|
|
10,522
|
|
|
6,059
|
|
Residential mortgage-backed
|
|
1,423
|
|
|
1,381
|
|
|
1,381
|
|
|
1,426
|
|
|
Oil & Gas
|
|
35,083
|
|
|
31,488
|
|
|
31,488
|
|
|
15,570
|
|
|
Manufacturing
|
|
39,011
|
|
|
39,619
|
|
|
41,661
|
|
|
39,548
|
|
|
Banking/finance
|
|
15,000
|
|
|
15,000
|
|
|
14,700
|
|
|
13,800
|
|
|
Other
|
|
74,174
|
|
|
75,000
|
|
|
76,059
|
|
|
50,829
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Totals
|
|
$
|
173,700
|
|
|
171,519
|
|
|
175,811
|
|
|
127,232
|
|
|
|
|
|
Amortized
|
|
|
|
|
|||
Securities Available for Sale
|
|
|
|
Cost
|
|
Fair Value
|
|
|
|||
Company
|
|
S&P Rating
|
|
September 30, 2016
|
|
September 30, 2016
|
|
Country Domiciled
|
|||
|
|
(In thousands)
|
|||||||||
|
|
|
|
|
|
|
|
|
|||
Allergan
|
|
BBB
|
|
$
|
22,695
|
|
|
23,813
|
|
|
Ireland
|
CRH
|
|
BBB+
|
|
25,748
|
|
|
27,934
|
|
|
Ireland
|
|
Medtronic
|
|
A
|
|
34,113
|
|
|
36,918
|
|
|
Ireland
|
|
Shire
|
|
BBB-
|
|
23,997
|
|
|
24,129
|
|
|
Ireland
|
|
Telefonica
|
|
BBB
|
|
9,026
|
|
|
9,316
|
|
|
Spain
|
|
|
|
|
|
|
|
|
|
|
|||
Totals
|
|
|
|
$
|
115,579
|
|
|
122,110
|
|
|
|
|
|
|
|
Amortized
|
|
|
|
|
|||
Securities Held to Maturity
|
|
|
|
Cost
|
|
Fair Value
|
|
|
|||
Company
|
|
S&P Rating
|
|
September 30, 2016
|
|
September 30, 2016
|
|
Country Domiciled
|
|||
|
|
(In thousands)
|
|||||||||
|
|
|
|
|
|
|
|
|
|||
EDP
|
|
BB+
|
|
$
|
17,288
|
|
|
18,202
|
|
|
Portugal
|
Enel
|
|
BBB
|
|
19,962
|
|
|
21,147
|
|
|
Italy
|
|
Finmeccanica
|
|
BB+
|
|
15,012
|
|
|
16,350
|
|
|
Italy
|
|
Iberdrola Finance
|
|
BBB+
|
|
2,951
|
|
|
3,280
|
|
|
Spain
|
|
Kerry Group
|
|
BBB+
|
|
24,929
|
|
|
24,996
|
|
|
Ireland
|
|
Medtronic
|
|
A
|
|
19,967
|
|
|
20,888
|
|
|
Ireland
|
|
Telefonica
|
|
BBB
|
|
8,065
|
|
|
8,884
|
|
|
Spain
|
|
Perrigo
|
|
BBB-
|
|
25,817
|
|
|
26,564
|
|
|
Ireland
|
|
|
|
|
|
|
|
|
|
|
|||
Totals
|
|
|
|
$
|
133,991
|
|
|
140,311
|
|
|
|
|
September 30, 2016
|
||||||||
|
Fair
Value
|
|
Amortized
Cost
|
|
Unrealized
Gains (Losses)
|
||||
|
(In thousands)
|
||||||||
|
|
|
|
|
|
||||
Securities held to maturity:
|
|
|
|
|
|
||||
Debt securities
|
$
|
7,542,335
|
|
|
7,106,373
|
|
|
435,962
|
|
Securities available for sale:
|
|
|
|
|
|
|
|||
Debt securities
|
3,087,812
|
|
|
2,920,588
|
|
|
167,224
|
|
|
Equity securities
|
18,982
|
|
|
14,021
|
|
|
4,961
|
|
|
|
|
|
|
|
|
||||
Totals
|
$
|
10,649,129
|
|
|
10,040,982
|
|
|
608,147
|
|
|
|
September 30, 2016
|
|
December 31, 2015
|
|||||||||
Investment Origination Year
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
|||||
|
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|
|||||
Subprime:
|
|
|
|
|
|
|
|
|
|||||
1998
|
|
$
|
2,322
|
|
|
2,402
|
|
|
2,836
|
|
|
2,933
|
|
2003
|
|
3,128
|
|
|
4,554
|
|
|
3,474
|
|
|
5,012
|
|
|
2004
|
|
13,777
|
|
|
13,797
|
|
|
25,675
|
|
|
25,739
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total
|
|
$
|
19,227
|
|
|
20,753
|
|
|
31,985
|
|
|
33,684
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||||||||
|
Amount
|
|
%
|
|
Amount
|
|
%
|
||||||
|
(In thousands)
|
|
|
|
(In thousands)
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||
Mortgage Loans by Geographic Region:
|
|
|
|
|
|
|
|
||||||
West South Central
|
$
|
83,832
|
|
|
56.8
|
|
|
$
|
58,002
|
|
|
53.2
|
|
East North Central
|
24,914
|
|
|
16.9
|
|
|
18,477
|
|
|
17.0
|
|
||
New England
|
11,576
|
|
|
7.9
|
|
|
11,830
|
|
|
10.9
|
|
||
Pacific
|
9,931
|
|
|
6.7
|
|
|
10,101
|
|
|
9.3
|
|
||
East South Central
|
5,815
|
|
|
3.9
|
|
|
5,818
|
|
|
5.3
|
|
||
South Atlantic
|
9,839
|
|
|
6.7
|
|
|
3,047
|
|
|
2.8
|
|
||
Mountain
|
1,656
|
|
|
1.1
|
|
|
1,686
|
|
|
1.5
|
|
||
Gross balance
|
147,563
|
|
|
100.0
|
|
|
108,961
|
|
|
100.0
|
|
||
|
|
|
|
|
|
|
|
||||||
Allowance for possible losses
|
(650
|
)
|
|
(0.4
|
)
|
|
(650
|
)
|
|
(0.6
|
)
|
||
|
|
|
|
|
|
|
|
||||||
Totals
|
$
|
146,913
|
|
|
99.6
|
|
|
$
|
108,311
|
|
|
99.4
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||||||||
|
Amount
|
|
%
|
|
Amount
|
|
%
|
||||||
|
(In thousands)
|
|
|
|
(In thousands)
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||
Mortgage Loans by Property Type:
|
|
|
|
|
|
|
|
||||||
Retail
|
$
|
76,252
|
|
|
51.7
|
|
|
$
|
66,237
|
|
|
60.8
|
|
Office
|
47,515
|
|
|
32.2
|
|
|
22,941
|
|
|
21.0
|
|
||
Land/Lots
|
4,819
|
|
|
3.3
|
|
|
4,445
|
|
|
4.1
|
|
||
Hotel/Motel
|
5,397
|
|
|
3.6
|
|
|
1,513
|
|
|
1.4
|
|
||
All other
|
13,580
|
|
|
9.2
|
|
|
13,825
|
|
|
12.7
|
|
||
Gross balance
|
147,563
|
|
|
100.0
|
|
|
108,961
|
|
|
100.0
|
|
||
|
|
|
|
|
|
|
|
||||||
Allowance for possible losses
|
(650
|
)
|
|
(0.4
|
)
|
|
(650
|
)
|
|
(0.6
|
)
|
||
|
|
|
|
|
|
|
|
||||||
Totals
|
$
|
146,913
|
|
|
99.6
|
|
|
$
|
108,311
|
|
|
99.4
|
|
|
September 30,
2016 |
|
June 30,
2016 |
|
December 31,
2015 |
||||
|
(In thousands except percentages)
|
||||||||
|
|
|
|
|
|
||||
Debt securities - fair value
|
$
|
10,630,147
|
|
|
10,645,963
|
|
|
10,196,658
|
|
Debt securities - amortized cost
|
$
|
10,026,961
|
|
|
10,026,030
|
|
|
10,007,665
|
|
Fair value as a percentage of amortized cost
|
106.02
|
%
|
|
106.18
|
%
|
|
101.89
|
%
|
|
Net unrealized gain balance
|
$
|
603,186
|
|
|
619,933
|
|
|
188,993
|
|
Ten-year U.S. Treasury bond – (decrease) increase in yield for the period
|
0.12
|
%
|
|
(0.30
|
)%
|
|
0.10
|
%
|
|
Net Unrealized Gain Balance
|
||||||||||||||
|
At September 30, 2016
|
|
At
June 30, 2016
|
|
At
December 31,
2015
|
|
Quarter
Change in
Unrealized
Balance
|
|
Year-to-date Change in
Unrealized
Balance
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
Debt securities held to maturity
|
$
|
435,962
|
|
|
457,826
|
|
|
161,469
|
|
|
(21,864
|
)
|
|
274,493
|
|
Debt securities available for sale
|
167,224
|
|
|
162,107
|
|
|
27,524
|
|
|
5,117
|
|
|
139,700
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Totals
|
$
|
603,186
|
|
|
619,933
|
|
|
188,993
|
|
|
(16,747
|
)
|
|
414,193
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||
|
(In thousands)
|
|||||||||||
|
|
|
|
|
|
|
|
|||||
Product Line:
|
|
|
|
|
|
|
|
|||||
Traditional Life
|
$
|
1,636
|
|
|
1,501
|
|
|
4,616
|
|
|
4,178
|
|
Universal Life
|
27,831
|
|
|
23,533
|
|
|
82,781
|
|
|
59,719
|
|
|
Annuities
|
126,275
|
|
|
119,921
|
|
|
388,102
|
|
|
360,051
|
|
|
|
|
|
|
|
|
|
|
|||||
Total
|
$
|
155,742
|
|
|
144,955
|
|
|
475,499
|
|
|
423,948
|
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Shares that May yet Be Purchased Under the Plans or Programs
|
||
|
|
|
|
|
|
|
|
|
||
July 1, 2016 through July 31, 2016
|
|
—
|
|
|
—
|
|
|
N/A
|
|
N/A
|
August 1, 2016 through August 31, 2016
|
|
—
|
|
|
—
|
|
|
N/A
|
|
N/A
|
September 1, 2016 through September 30, 2016
|
|
—
|
|
|
—
|
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
||
Total
|
|
—
|
|
|
—
|
|
|
N/A
|
|
N/A
|
(a)
|
Exhibits
|
Exhibit 31(a)
|
-
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
Exhibit 31(b)
|
-
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
Exhibit 32(a)
|
-
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
Date:
|
November 4, 2016
|
|
|
/S/ Ross R. Moody
|
|
|
|
|
|
Ross R. Moody
|
|
|
|
|
|
Chairman of the Board,
|
|
|
|
|
|
President, Chief Executive Officer and Director
|
|
|
|
|
|
(Authorized Officer)
|
|
|
|
|
|
|
|
|
|
|
|
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Date:
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November 4, 2016
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/S/ Brian M. Pribyl
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Brian M. Pribyl
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Senior Vice President,
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Chief Financial Officer and Treasurer
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(Principal Financial Officer)
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(Principal Accounting Officer)
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1 Year National Western Life Chart |
1 Month National Western Life Chart |
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